- The Wall Street investment bank predicts an ounce of gold will cost $3,700 by the end of this year, up from a previous forecast of $3,300, citing more central banks buying the precious metal along with higher ETF flows. Donald Trump’s presidency has been a blessing for goldbugs now profiting from the uncertain economic outlook sparked by his administration’s trade war.
In times of great uncertainty, few assets can outperform gold. The precious metal has been a safe haven for decades—and this year, it’s enjoyed a bull run that has rewarded bullion owners with massive gains.
Wall Street investment bank Goldman Sachs now argues the price has further room to run thanks to the growing likelihood of a global economic slump sparked by the Trump administration’s repeated flip-flopping when it comes to its punitive tariffs.
“This week’s stress in the U.S. bond market and gold’s rally today and yesterday increase our conviction that gold is uniquely positioned to hedge recession risk,” its analysts wrote on Monday.
They estimate it could jump from its previous forecast of $3,300 an ounce to $3,700 by the end of the year, underpinned by an increase in their forecast for central-bank purchases—in part looking to de-risk reserves through a diversification out of the dollar—as well as more flows into gold exchange-traded funds.
The fierce rally surprised even Goldman, which correctly predicted November lows around $2,600 were an attractive entry point. At the time, however, the bank never expected anything more than $3,150 by the end of 2025. Thanks to the Trump administration’s seemingly chaotic handling of its trade agenda, the market already blew through that estimate this month.
Only in an extreme scenario does Goldman Sachs expect the price of the precious metal to hit $4,500 an ounce.
Political concerns over safety of gold reserves stored in U.S.
Gold has even pushed itself to the forefront of the political agenda. President Trump said he wanted to audit the gold in Fort Knox, while Germany, which holds the second-largest reserves after the U.S., could repatriate its gold bunkered at the Federal Reserve’s regional bank in New York.
There are drawbacks, however, to owning gold: first and foremost, the opportunity cost. Unlike Treasury bonds or money-market funds—both deemed ultrasafe investments—there is no interest paid on bullion.
Institutional investors, furthermore, can see returns diminished as a result of storage costs. In conventional bull markets where economic growth is healthy, there’s little reason to overweight gold in a balanced portfolio.
Yet, Trump’s on-again, off-again tariff policy has made it near impossible for companies to realistically plan for the coming weeks and even months, sparking fears of an impending global recession.
In this favorable environment for gold, investors looking for more exposure don’t just have the option of buying gold ETFs or even the physical metal itself.
Outlook so bullish, Allied Gold cancels sale of stake at lowball February price
Mining stocks, such as those of Denver-based Newmont, Barrick Gold of Canada, and South Africa’s AngloGold Ashanti, are another means of profiting from gold’s rising price, according to Peter Schiff.
The Euro Pacific money manager, a well known “goldbug” who has for years recommended the shiny metal, now says miners can potentially offer greater absolute upside since their cost of energy—a key input that erodes profits—is simultaneously dropping.
“Really for the first time in my career, I’m actually telling people, for now don’t buy physical gold,” Schiff said. “When you buy gold mining companies, you’re buying gold that’s still in the ground—and gold in the ground has never been cheaper in all of history than gold above ground.”
For this very reason, Canada’s Allied Gold on Monday backed out of a deal struck in February to sell a 12% stake to an Abu Dhabi investment firm after both the price in bullion as well as its own stock soared well past the prices they agreed on only a few weeks ago.
