Gold gatherings could be extended if central bank purchases and ETF inflows remain, analysts predict.
Citi Research has raised its gold price target for the next three months from $3,000 to $3,200 per ounce.
“For our bulls, we have a gold price of $3,500 per ounce by the end of the year, backed by much higher hedge/investment demand for the fear of hard landings/stagflation in the US,” city analysts said in a note on March 20.
The upward revision comes as Spot Gold surged temporarily to an all-time high on March 20, driven by the Federal Reserve’s interest rate cuts and growing expectations for sustainable economic and geopolitical uncertainty. The Fed’s two recent potential interest rate reduction signals this year have strengthened gold appeals as a safe asset.
Spot Gold reached a historic peak of $3,055.96 early in Thursday’s trading session, stabilizing at $3,042.03 per ounce as of 12:15pm. Earning profits from the start of the year, over 15%, remained one of the most performant major products ever in 2025.
According to ING analysts, the rally is driven by trade tensions, central bank acquisitions and ETF maintenance. Global Gold ETF Holdings has expanded this year by 3.5 million ounces to nearly 86.4 million ounces, they said. Meanwhile, the central bank purchased 1,045 tonnes of gold in 2024, accounting for around 20% of total demand, according to the World Gold Council.
“If we see more additions, we will see a further tailwind in bullion prices. We believe there is an increase in gold,” the analyst wrote in a recent memo, adding that the ongoing trade disputes and risk of inflation are strengthening investors’ appetites.
Daniel Gali, a product strategist at TD Securities, said in an interview with BNN Bloomberg that central bank gold purchases are a long-term trend, driven in part by efforts in some countries to reduce reliance on the US dollar. Traditionally, states sold assets controlled by the dollar, bought gold when the dollar was strong, and made strategic hedges against currency depreciation. However, at the latest rally, the US dollar has weakened and the change has increased the purchase of gold from Western investors, Gali said.
Additionally, macro funds that recently settled large positions have continued to re-enter the market as Gold reaches its all-time high. According to Ghali, the setup promotes the FOMO (missed fear) effect, further accelerating the upward momentum of gold.
“These liquidations are likely to be linked to a decline in risk budgets and a psychological $3,000 per ounce profit, in contrast to the views of direction,” Gali wrote in a social media post. “But the gold setup has been further strengthened as the macro funds restocked their war chests.”
“It’s still a ‘I win head, lose tail’ setup, but the demand associated with currency suppression fading is the other side of the coin screaming FOMO,” he added in another post.
ING analysts and others hope that ongoing trade disputes and implementation of new tariff measures will continue to support gold prices, and the latest developments in US trade policy point to possible escalations of tensions with trading partners.
President Donald Trump has imposed a 25% tariff on steel and aluminum imports, prompting retaliation from the European Union.
Trump struck Canada and Mexico with a 25% tariff from March 4, but he suspended tariffs on goods and services compliant with the US, Mexico and Canada Agreement (USMCA) until April 2. Canada fought back with $20 billion tariffs on US goods, and the two countries agreed to a new trade talks.
Meanwhile, Trump has raised China’s tariffs by 20% in addition to his existing 10% duties, and has imposed a 15% tariff on American produce, including pork and chicken.
Trump looks to see global trade tensions intensify as they consider mutual tariffs for all trading partners on April 2, and will potentially set the gold stages in stages.
Reuters contributed to this report.
