Gold’s glittering run in 2025 may have more room to the upside argues Goldman Sachs.
On Tuesday, the investment bank lifted its year end price target on gold to $3,100 from $2,890 previously. Goldman says “structurally higher” central bank demand will add 9% to the price gold by year end along with a slight boost from ETF holdings.
But Goldman adds that Trump tariff concerns could be an “upside” risk to gold prices.
“However, if policy uncertainty—including tariff fears—stays high, higher speculative positioning for longer could push gold prices as high as $3,300 an ounce by year-end,” said Goldman strategist Lina Thomas.
Precious metals such as gold are currently having a solid ride some two months into the year as investors hedge their exposure to stocks amid policy uncertainty from the Trump administration and the Federal Reserve.
Year to date, gold prices are up 9.7%% to $2,925 an ounce. They are hovering around record highs. Over the past year, gold has gained an impressive 43%. By comparison, the S&P 500 and Dow Jones Industrial Average are up 20% and 15%, respectively.
Silver and platinum prices are up 42% and 10% in one years time, respectively.
Stocks exposed to the gold trade have subsequently come on strong.
Shares of gold miner Barrick Gold (GOLD) are up 16% year to date. The SPDR Gold Shares ETF (GLD) has tacked on 10%.
Barrick Gold in particular is basking in gold’s record run.
The company posted its highest net earnings in a decade last year. Operating cash flow in the fourth quarter rose 18% to $1.4 billion, bringing the total for the year to $4.5 billion. It marked the highest level hit for the company since 2020. The company sent $500 million on share buybacks last year and $700 million in dividends.
“Gold is becoming more important as a safe haven in a geopolitically uncertain world,” Barrick Gold CEO Mark Bristow told analysts on an earnings call last week. “Needless to say, it’s an exciting time to be a gold and copper miner with more upside in the commodity price, in my opinion, anyway.”
Some traders, however, think a short-term pause in gold prices is nearing given its rapid ascent in value.
“There are signs of short-term exhaustion,” New York Stock Exchange strategist Michael Reinking said in a note.
Noted veteran trader Kenny Polcari, “It feels a bit tired to me….it feels a bit stretched…..so while I like gold as part of a portfolio- I am not chasing it….up here.”
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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