The price of gold, which has been rising for well over two years, has hit yet another record high price – the 17th time so far this year that the precious metal has established a new record.
The price is climbing on the futures market. Gold is ending the week after hitting a high of $3,114 an ounce, a gain of 17% since Jan. 2, outperforming the stock market.
What’s behind gold’s meteoric rise? Wall Street analysts point to a pair of drivers. The Trump administration’s tariffs on cars and other products are creating fears of a global trade war that will harm the economy in the U.S. and dozens of other countries.
At the same time, the dollar has weakened in the face of trade tensions. As the dollar goes down, gold priced in dollars gets more expensive.
How much higher?
A question some investors may be asking is, “How much higher can the price of gold go?” No one has a crystal ball but analysts at Bank of America this week put out a note raising their price target from $3,000 to $3,500 an ounce. They note China and other central banks have increased their gold purchases.
The note reiterates the belief that U.S. trade policies will continue to weaken the dollar, increasing the number of dollars required to purchase an ounce of gold.
Consumers who are considering investing in gold should consult a trusted and objective financial adviser before taking the plunge at gold’s record high. While Wall Street remains bullish on gold – JPMorgan doesn’t rule out a price of $4,000 an ounce – the current price run is largely based on economic uncertainty, which is subject to change.