Gold prices hit another record high of $2,766.00 per ounce Tuesday, while major Wall Street banks have raised their 2025 target for gold to $3,000 or higher.
Gold has surged more than 34% this year. Driving the gains are: uncertainties surrounding the U.S. presidential election; nagging inflation and continuing fears of a recession; expected Federal Reserve interest rate cuts; and war in the Middle East, Ukraine, and, potentially, Taiwan.
“Citi, Goldman Sachs, and Bank of America have significantly raised their 2025 price target for gold to $3,000 or higher,” with BofA calling gold the “ultimate safe haven,” says Mike Fuljenz, president of Universal Coin and Bullion.
Max Baecker, president of American Hartford Gold, adds that another key factor driving up gold is the fact “inflation started ticking back up in September. Inflation had been slowing, but the impact isn’t being felt because the cumulative increase from 2020 to 2024 is 21.83%.”
Furthermore, Baecker adds, “Economists see the policies of both presidential candidates — more spending versus tax cuts — leading to more inflation. This is prompting investors and central banks to purchase record amounts of gold to protect against currency devaluation and inflation.”
Geopolitical tensions are another major factor driving investors into safe-haven gold, according to precious metals dealer Kitco. Investors often favor gold in times of political instability to protect their wealth against market downturns.
The wars in Ukraine and Gaza and tensions in Taiwan each present serious risks. Japan can now be added into the mix of geopolitical uncertainty after the weekend election, says Peter Grant, vice president and senior metals strategist at Zaner Metals.
Fears of instability in the Middle East are heightened by the fact the region is critical to global oil supply. An escalation of the war there could create an energy crisis that would ripple through global markets, according to dealer Blanchard & Co.
The continuing Russia-Ukraine conflict is disrupting energy supplies and driving up inflation by impacting vital commodity markets, including oil and natural gas, Kitco says.
Alex Ebkarian, COO of Allegiance Gold, notes: “Central banks have been increasing gold reserves since 2022, especially after the U.S. weaponized the dollar against Russia and initiated sanctions.”
If China were to take military action in Taiwan, the economic repercussions would be severe, according to State Street Global Advisors. Taiwan is critical to the semiconductor industry, and any conflict there would significantly disrupt tech supply chains — leading investors to seek out gold as a store of value.
“Gold should retain its upward bias and may even flirt with $2,800 in the days ahead, as long as U.S. election risks continue weighing on market sentiment, while Fed rate cut expectations remain intact,” says Han Tan, chief market analyst at Exinity Group.
As Ebkarian sums it up, “Today, all roads lead to gold — geopolitical risks, a weakening dollar, central banks buying gold, and economic uncertainty.”
Lee Barney ✉
Lee Barney, Newsmax’s financial editor, has been a financial journalist for 30 years, covering the economy, retirement planning, investing and financial technology.
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