Gold prices dropped over 3% to $2,228 per ounce after a temporary tariff rollback between the U.S. and China reduced the metal's appeal as a safe-haven asset.
Despite the dip, analysts from Zaner Metals and Citi expect gold to stabilize and potentially rise, with long-term projections ranging from $3,150 to as high as $4,000.
Ongoing gold purchases by central banks—especially in China—signal strong demand and reinforce gold’s role as a hedge amid persistent global economic uncertainties.
Gold prices fell by more than 3% on Monday, falling to $2,228 per ounce, following the announcement of a temporary tariff reduction between the U.S. and China.
Gold had rallied as a safe haven from the economic uncertainty caused by a potential trade war. The sudden de-escalation in trade tensions seemed to diminish gold's appeal as a safe-haven asset -- at least for the moment.
But despite this short-term dip, some market analysts maintain a bullish outlook for gold as an investment and hedge. Peter Grant of Zaner Metals anticipates that gold will consolidate between $3,200 and $3,500, with potential dips to $3,150, but expects a retest of the $3,500 level soon.
Similarly, Citi has revised its short-term gold outlook, projecting price consolidation in the $3,000 to $3,300 range and lowering its zero- to 3-month target to $3,150.
Other long-term forecasts also remain optimistic. Business Insider reports Jeff Gundlach, CEO of DoubleLine Capital, predicts a continued bullish trend for gold, forecasting a price surge up to $4,000 per ounce—a 20% rise from its current level.
Rising price targets
Goldman Sachs and UBS have also raised their gold price targets to $3,500, citing rising tariffs, slowing growth, elevated inflation, and lingering geopolitical risks.
Concerns about trade aren’t the only factor supporting gold prices. Central banks continue to add to their gold reserves, supporting the price. According to JPMorgan, central bank buying, particularly from China, could be a source of stronger demand in 2025. This trend reflects increasing demand for safe-haven investments in unstable times.
While gold prices have recently dipped due to improved U.S.-China trade relations, analysts suggest that the metal's long-term prospects remain strong, supported by central bank buying, investor demand, and ongoing economic uncertainties.
In Tuesday's futures trading, Gold reclaimed 0.81% of Monday's decline.