Will the price of gold rise to $3,500 this year?

Major financial institutions around the world have raised their forecasts for gold prices this year. Many institutions have raised their forecasts for gold prices this year to around $3,000 to $3,200, and some institutions even believe that there is room for an increase to $3,500 this year. However, the outlook for gold prices is not one-sided.

Given the upward momentum of gold prices breaking through the $3,000/ounce mark for the first time, major financial institutions around the world have begun to raise their price forecasts for this year. Australia’s Macquarie Group believes that there is room for an increase to $3,500 this year. The agency sees the risks of the Trump administration and geopolitics in the United States and the purchases by central banks as positive.

New York futures (the most active settlement month) as an international indicator of gold prices broke through $3,000 on March 13 and have remained at a price slightly above that level since then. Previously, factors such as the uncertainty of the US government’s operations and economic prospects drove investment funds into gold, which is considered a safe asset. The increasing trend in the total net assets of gold exchange-traded funds (ETFs) has already reflected this situation.

Among major financial institutions, many have raised their gold price forecasts for the year to around $3,000 to $3,200, and there are growing views that it may rise further in the short term.

The main reasons cited by financial institutions are mostly policy risks from the Trump administration. The Trump administration is pushing for measures such as a 25% tariff on steel and aluminum, and has said that it will also increase auto tariffs and reciprocal tariffs in the future.

The US’s increased tariffs have also led to economic concerns in the country. “Since risks from the United States cannot be avoided by holding U.S. Treasuries and dollars, which are considered safe assets, demand for safe assets is concentrating on gold,” said Tsutomu Kosuge, a representative of Japan’s MarketEdge.

In mid-March, Swiss bank UBS pointed out that “gold prices will rise as long as the intensification of U.S. policy risks and trade frictions continue to increase demand for safe assets,” and raised its gold price forecast for the end of the year to $3,200, up $200 from the previous price. In February, Goldman Sachs raised its basic year-end forecast from $2,890 to $3,100, saying, “If policy uncertainty, including tariffs, remains high, it may reach $3,300 by the end of the year.”

In mid-March, Macquarie Group set the average gold price for July to September at $3,150, and analyzed that if there is no sign of improvement in the US fiscal deficit, “gold prices will try to refresh the highest point of $3,500.”

At present, geopolitical risks are on the rise. Around the Palestinian autonomous region of Gaza, the Israeli army launched another attack on the Islamic organization Hamas, and the US military began air strikes on the pro-Iranian armed group Houthi in Yemen. Russia and Ukraine are also far from reaching a complete ceasefire agreement.

BNP Paribas analyzed that “the US government’s measures to increase tariffs and restructure international relations have raised macroeconomic and geopolitical uncertainties to a new level, which is leading to rising gold prices.” The agency raised the average annual gold price to $2,990, $215 higher than before. In addition, the agency also predicts that the price of gold may exceed $3,100 by April-June.

As a factor that pushed the price of gold to an all-time high, the central bank’s record gold purchases cannot be ignored. The central bank has increased its gold holdings by 1,000 tons each year in the past three years, a record high. Goldman Sachs predicts that “gold prices will rise due to the increase in structural demand from the central bank.” UBS predicts that “(central bank) purchases may reach the highest level in recent years, such as around 1,000 tons, again in 2025.”

MarketEdge’s Kosuge believes that “as gold prices continue to rise, the sense of security and success that has not collapsed so far is strengthening. As many financial institutions have raised their gold price forecasts, investors may become more optimistic.”

However, the outlook for gold prices is not a one-sided rise.

BNP Paribas showed a cautious view, saying, “If trade frictions do not continue to intensify, it will be difficult for gold prices to maintain further upward momentum in the second half of the year.” Japanese market analyst Itsuo Toyoshima pointed out: “If the theme of US tariff risks becomes outdated, the market’s attention will shift to US monetary policy. If expectations of US interest rate cuts weaken, there is a possibility of a gold sell-off.”