Gold hits new high following Fed chair's stark tariffs warning

Nora Redmond

Thu, Apr 17, 2025, 1:03 PM 2 min read

• Gold hit a new high Wednesday after Federal Reserve chair Jerome Powell warned about the impact of tariffs.

• Goldman Sachs last week raised its 2025 gold price forecast by $400 to $3,700.

• Gold has surged this year as investors seek safe havens amid tariff-induced uncertainty.

Gold is having a stellar year — and its surge may not be over yet.

Spot prices hit another record high of $3,357.40 per troy ounce on Wednesday before falling back after Federal Reserve chair Jerome Powell said President Donald Trump's tariffs were "significantly larger" than expected.

He warned that the policies could lead to weaker economic growth and higher inflation.

Analysts at Deutsche Bank called gold's latest price surge the "biggest daily jump in two years" in a note on Wednesday.

Last week Goldman Sachs raised its overall price forecast by $400 to $3,700 an ounce by the end of the year.

Lina Thomas, a commodities strategist at the bank, and Daan Struyven, cohead of global commodities research, said in a note on April 11 they expected gold to trade in a range between $3,650 to $3,950, up from $3,250 to $3,520.

The increase was based on stronger-than-expected central bank
demand and a boost from increased recession risk. The Goldman analysts said that stresses in bond markets "increase our conviction that gold is uniquely positioned to hedge recession risk."

The bank's economists say there's a 45% chance of a US recession in the next 12 months. If that happens, the analysts said gold could hit $3,880 by the end of the year — or even as much as $4,500 under certain scenarios.

Gold regained momentum after losing ground in the days following the announcement of tariffs on April 2 as investors seek out safe-haven assets, which typically maintain or increase their value during market turbulence.

Goldman put the dip down to investors liquidating gold "to meet margin calls" in last week's stock market selloff.

The metal has hit a number of records this year, passing the $3,000 threshold for the first time last month.

At the end of last week, UBS analysts raised their 2025 gold price target to $3,500, citing "escalating tariff uncertainty, weaker growth, higher inflation and lingering geopolitical risks." Bank of America also has a price target of $3,500.

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