In a research note released on Tuesday, ANZ has increased its gold price forecast to $3,100 per ounce for the zero to 3-month period and $3,200 per ounce for the 6-month period.
Gold prices surged past the significant $3,000 per ounce threshold on Tuesday, marking the second time in history that the precious metal has reached this milestone.
For gold “we maintain our bullish view, amid strong tailwinds from escalating geopolitical and trade tensions, easing monetary policy, and strong central bank buying,” ANZ Bank was quoted in a Reuters report.
Safe-haven demand rises
This new peak was driven by investors seeking a safe haven amidst growing economic uncertainty, fueled by US President Donald Trump’s aggressive tariff policies.
These policies have sparked fears of a global trade war, leading to a flight towards safe-haven assets like gold.
The escalating trade tensions have rattled financial markets and cast a shadow over the global economic outlook, prompting investors to flock to the perceived safety of gold.
This surge in demand for gold underscores the heightened anxiety among investors and their growing concerns about the potential economic fallout from the ongoing trade disputes.
“There has been a lot of back and forth on tariffs and this volatility and uncertainty has provided support for gold prices,” Ewa Manthey, commodities strategist at ING Group, said.
Gold prices have surged over 14% this year, setting a record high 14 times. The traditional safe haven asset has benefited from ongoing geopolitical instability.
Opportunities in silver
“As for the gold market, fear of import tariffs has tightened liquidity in the London spot market, as supply flows to the US. This has triggered arbitrage trades, with a widening spread between Comex futures and London spot,” ANZ said.
We see this supply dislocation taking some time to normalise and keeping silver prices volatile.
Despite the challenges posed by tariffs and other trade barriers, the demand for silver from the industrial sector is expected to remain strong.
This resilience is attributed to the essential role that silver plays in various industrial applications.
Furthermore, analysts at ANZ suggested that investment demand will be a key driver in boosting the price of silver.
As investors seek to diversify their portfolios and hedge against economic uncertainty, silver’s appeal as a precious metal is likely to increase.
Therefore, while tariffs may pose a short-term challenge, the long-term outlook for silver demand and price appreciation remains positive, driven by both industrial and investment factors.
At the time of writing, silver prices on COMEX rose 0.7% to $34.530 an ounce.
The bank predicted that silver will trade between $34 and $36 per ounce in the near future.
Central banks continue buying gold
Net purchases of gold by central banks accelerated in January, reaching 18 metric tonnes. This has also continued to support the yellow metal’s prices.
Emerging market central banks, particularly Uzbekistan, China, and Kazakhstan, were the primary buyers.
Although emerging economies are increasing their gold reserves at a faster rate, developed economies continue to hold a larger share of gold in their official reserves.
China’s central bank increased its gold reserves for the fourth month in a row in February.
This move comes despite record-high gold prices, and further additions are expected.
During Trump’s first term as US president, China’s central bank had added gold for roughly 10 consecutive months.
Central banks have doubled their annual gold purchases since the start of the Russia-Ukraine conflict in 2022, increasing from roughly 500 metric tonnes per year to over 1,000.
“Given Trump-related uncertainties on trade and geopolitics, central banks’ appetite, and surging ETF buying, we expect the gold rally to continue,” Manthey added.
We believe more gains for gold are in sight.
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