Gold prices surge to record high of $3,128 on tariff uncertainty; can hit $3,500 by 2025-end

Gold prices surged to a fresh all-time high of $3,128.06 per ounce, marking the third consecutive session of record gains. The precious metal's rally comes as mounting uncertainty over U.S. tariff policies rattles global markets, driving traders toward safe-haven assets. The latest boost was triggered by U.S. President Donald Trump’s announcement late Sunday, declaring that tariffs will be imposed on "essentially all countries" this week.

Trump’s tariff strategy, aimed at rebalancing global trade, has fueled fears of inflation and economic instability. This has kept investors on edge, prompting a flight from risky assets, including equities, and diminishing appetite for the U.S. dollar. As a result, gold—a traditional hedge against market volatility—has emerged as a preferred asset, benefiting from the wave of risk aversion.

Domestically, MCX Gold hit day's high of ₹89,060/10gm, which is up by ₹676 from the previous day on March 31.

Recession Fears and Rate-Cut Hopes Add to Gold's Appeal

In addition to trade-related jitters, concerns over a potential U.S. recession are further boosting demand for gold. The growing likelihood that the Federal Reserve (Fed) will resume its rate-cutting cycle has added momentum to the metal's rally.

With rising tariff pressures expected to slow U.S. economic growth, analysts anticipate that the Fed will be forced to ease its monetary policy to counteract the impact. The prospect of lower interest rates tends to weaken the U.S. dollar, making gold—priced in dollars—more attractive to foreign investors.

Moreover, the recent decline in the greenback has provided additional support for gold prices. A weaker dollar reduces the cost of gold for international buyers, driving up demand and pushing prices higher.

However, market experts caution that gold's rapid ascent could face short-term resistance. The metal is currently overbought, raising the possibility of a temporary price correction. Traders are now awaiting key U.S. macroeconomic data releases later this week, which could influence short-term gold price movements.

BofA Projects Gold at USD 3,500/Oz in 18 Months

Looking ahead, Bank of America (BofA) Global Research expects gold prices to climb further. According to a recent report, gold could potentially reach USD 3,500 per ounce over the next 18 months if non-commercial purchases increase by 10 percent.

The report highlights how even a slight uptick in investment demand could significantly impact gold prices this year. It estimates that a mere 1 percent increase in investment flows could push gold prices to an average of USD 3,000 per ounce in 2025.

BofA’s analysis underscores the strong correlation between rising investment demand and gold price appreciation. The study notes that while reaching USD 3,500 per ounce would require a substantial 10 percent growth in non-commercial demand, the scenario is considered challenging but achievable. The report emphasizes that even modest inflows could substantially drive up gold prices, especially given the current economic environment.

Outlook: Gold’s Upward Trajectory Likely to Continue

Gold’s recent rally reflects growing concerns over trade tensions, inflation, and economic uncertainty. With Trump’s tariff policies set to take effect and the Fed potentially resuming rate cuts, the metal is expected to remain a preferred safe-haven asset.

While short-term corrections due to overbought conditions are possible, the broader outlook for gold remains bullish. Rising geopolitical risks, a weaker dollar, and increased central bank and institutional buying are likely to sustain the metal’s upward momentum.

If BofA's projection materializes, gold could breach the USD 3,500 per ounce mark by 2025, cementing its position as a top-performing asset amid global economic turbulence.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.