Gold Prices Surge Past $3,000 as Safe-Haven Demand Strengthens; Analysts Raise Price Target

Gold prices soared past the $3,000 mark on Monday, driven by strong safe-haven demand amid ongoing economic uncertainty and geopolitical tensions. The precious metal continues to attract investors seeking stability as trade tariff concerns and a slowing global economy fuel market volatility.

Geopolitical Tensions and Economic Uncertainty Fuel Gold Rally

The demand for gold as a safe-haven asset was further intensified by escalating geopolitical unrest in the Middle East. The U.S. launched a series of airstrikes against Houthi rebels in Yemen in response to their attacks on vital shipping routes in the Red Sea, adding to market jitters.

However, gold’s rally faced some resistance due to signs of progress in ceasefire talks between Russia and Ukraine. U.S. President Donald Trump announced plans to speak with Russian President Vladimir Putin on Tuesday, raising hopes for diplomatic advancements.

Despite hitting record highs above $3,000 per ounce last week, gold prices saw some profit-taking, leading to slight corrections in the market.

Trade Tariffs and Economic Slowdown Keep Gold Strong

Investor concerns over trade tariffs also contributed to gold’s bullish trend. On Sunday, Trump reiterated his stance on imposing reciprocal and sectoral tariffs starting April 2, a move expected to heighten global trade tensions.

Uncertainty lingers over Trump’s commitment to these tariffs, especially after his previous reversals on trade measures involving Canada and Mexico. Nevertheless, key global players—including China, the European Union, and Canada—have prepared retaliatory strategies, which could escalate trade conflicts further.

Fears of trade-related disruptions and inflationary pressures have intensified concerns about a potential U.S. recession. Additionally, investors are closely watching central bank meetings this week, particularly those of the Federal Reserve, Bank of Japan, and Bank of England, for insights into future monetary policies.

Adding to economic concerns, U.S. retail sales data for February showed a modest 0.2% increase, falling short of the expected 0.6% rise. This weaker-than-anticipated consumer spending—a key driver of economic growth—added to market anxieties.

UBS Raises Gold Price Target to $3,200 Amid Market Uncertainty

In response to heightened risks and surging gold prices, UBS has revised its price target for gold, raising it to $3,200 per ounce from its previous forecast of $3,000.

This adjustment reflects growing investor interest in gold as a reliable asset during uncertain times. The surge in gold prices has also been accompanied by increased inflows into gold exchange-traded funds (ETFs), highlighting the metal’s strong appeal as a safe-haven investment.

UBS remains bullish on gold, encouraging investors to take advantage of any price dips to build long positions. The financial firm sees gold’s upward trajectory as a strategic opportunity, reinforcing its long-term value amid ongoing economic and geopolitical uncertainties.

Key Takeaways for Investors:

• Gold prices surpassed $3,000, driven by safe-haven demand and market uncertainty.

• U.S.-led airstrikes in Yemen and global trade tensions continue to impact prices.

• Weak U.S. retail sales data and upcoming central bank meetings add to economic concerns.

• UBS raises its gold price forecast to $3,200, signaling confidence in sustained price growth.

• Investors are advised to capitalise on pullbacks, as gold remains a strong hedge against volatility.

As global uncertainty persists, gold’s role as a protective asset is becoming increasingly prominent. Traders and investors are closely monitoring market movements to leverage opportunities in this high-value commodity.

(Sources: investing.com, reuters.com)