Gold to $3,100: Major Banks Raise Their Targets Amid Economic Uncertainty

• Gold is on track to reach a record price above $3,100/oz in the second quarter, as economic uncertainty rises due to U.S. President Donald Trump’s tariff policies, according to BNP Paribas SA.
• The forecast for the average annual price of Comex futures for the nearest month has been raised to $2,990/oz from the previous $2,775, analyst David Wilson stated in a note.
• Gold is expected to trade at an average of $3,070/oz in the second quarter and $3,015/oz in the third quarter.
• “The biggest change in our previous forecast is the impact of Trump’s tariff threats.”
• Concerns over Trump’s policies deepen fears of inflation and slowing economic growth.
• However, gold may struggle to maintain momentum in the second half of the year if trade tensions ease.

In a market gripped by uncertainty, gold is doing exactly what it should—holding steady. The precious metal has ignored recent volatility across asset classes, posting gains this month while global equities plummeted, bond yields rose, and trade tensions escalated. The path to $3,000 wasn’t as smooth as some had predicted in February, but this resilience remains a bullish signal for the asset. Gold has risen nearly 12% since the beginning of the year and continues to trade near record highs, despite sell-offs in risk assets. Even as hedge funds and CTAs reduced their bullish futures positions, investments in gold-backed ETFs remained steady. Short-term traders may position themselves based on momentum, but long-term investors continue to seek safety.

Fears of stagflation are growing as U.S. economic data worsens, strengthening the case for more Fed rate cuts by the end of the year. The metal typically gains value when the Fed lowers rates, making lower borrowing costs beneficial for gold. Meanwhile, Trump’s tariffs only add to its appeal. Trade tariffs on metals are prompting retaliatory measures from Europe and Canada, increasing the risk of inflationary supply shocks. Of course, some may worry that this rally is overextended, but in the current environment, gold’s resilience is more than just a defensive play. It signals that investors see structural risks ahead—from a weakening U.S. dollar to rising global protectionism. This sets the stage for gradually higher prices and a potential breakout above $3,000.