Gold prices see stellar rally amid tariff war: Goldman Sachs increases year-end target to $3,700/oz; check more details

Gold rates have been on a wild ride this year, especially since US President Donald Trump’s tariff fears have started to take control of the markets both in India and overseas.

On April 11, domestic gold rates climbed by as much as ₹6,250 to hit their lifetime high of ₹96,450 per 10 gm (24K, 99.9% purity) in Delhi.

Bullion markets were closed on Monday for the occasion of Ambedkar Jayanti. Meanwhile, spot gold in the overseas markets hit a record high of $3,245.42 per ounce on Monday, as per a Reuters report. On Tuesday, April 15, spot gold was at $3,226.24 an ounce, as of 0651 GMT (12:21 pm IST), while US gold futures were up 0.5% at $3,242.50, Reuters reported.

Gold prices are on the rise due to many factors, including a weak US dollar, trade war fears between the US and China due to Trump’s tariffs and Beijing’s retaliation, market volatility throughout the world, inflation rates, a major selloff in the US Treasury in the previous week, and US CPI data sparking speculation of possible interest rate cuts by the US Fed, which could result in further fuelling gold rates.

Gold Outlook for 2025

Gold is a safe haven asset, which means that investors seek refuge in the yellow metal when other investments turn risky. In the current geopolitical scenario, gold prices are expected to continue on their bull run, as per market experts.

The current surge in gold prices comes amid rising fears of a full-blown trade war between the US and China after the US imposed a total of 145% tariffs on Chinese imports, resulting in a 125% duty on American goods by China in retaliation. While Trump has put a 90-day pause on the steep reciprocal tariffs imposed on all trading partners of the US, a universal 10% tariff has already come into effect.

"Gold continues to firm today ... on ongoing investors' demand for defensive assets to mitigate portfolio volatility as the U.S. seems to be setting the stage for more tariffs to come," Reuters reported, quoting IG market strategist Yeap Jun Rong.

With gold prices recently hitting a new high, the upward trend remains intact, and as long as tariff uncertainties drag on, bullion may remain supported, Yeap added.

According to data from the World Gold Council, investments into Chinese gold ETFs have surged as well, surpassing both the total inflows recorded in the first quarter and the investments made in US-listed gold funds so far in April.

Furthermore, multinational investment banking and financial services firm Goldman Sachs has increased its year-end price target for gold to $3,700 per ounce amid escalating US-China trade war fears, fears of stagnation, and risks of recession, as per recent media reports.

This marks the third adjustment by the company in 2025, with a jump of as much as 12% in its forecast. Back in March, the investment bank increased its 2025 gold price target to $3,300 per ounce.

Additionally, as per media reports citing Augmont Goldtech’s weekly data, Comex gold futures increased by 7% in the previous week, the highest surge since March 2020. The prices have jumped 22.5%, or $593, since the start of this year.

Analysts believe that if the US dollar continues to weaken, gold prices may soon touch $3,300 (approximately ₹97,000 per 10 grams) per ounce. However, these soaring prices could also face corrections.