Goldman Sachs raises Gold price target to $3,700, predicts $4,500 peak in case of extreme risk

Gold prices surged to an all-time high last week, crossing $3,200 per ounce, as growing geopolitical tensions and economic instability continued to spook global investors. The latest rally saw gold touch a historic peak of $3,245.69 per ounce, fueled by fears surrounding the US-China trade war, recession concerns, and a flight to safer assets.

In response to these developments, Goldman Sachs has once again revised its year-end gold price target — this time to $3,700 per ounce by December 2025. This marks the investment bank’s third upward revision in 2025 alone. The bank had previously adjusted its forecast to $3,300 in March. Now, it’s also floated a “risk-extreme” scenario, in which gold could climb as high as $4,500 per ounce if global tensions escalate further.

The US-China trade standoff has been a major driver behind the gold rush. Washington has raised cumulative tariffs on Chinese imports to 145%, with Beijing retaliating with tariffs up to 125% on American products. President Donald Trump has also threatened sweeping “reciprocal” tariffs, including a flat 10% universal duty and additional levies on sectors like electronics and pharmaceuticals.

This economic uncertainty has triggered a spike in gold demand, both for physical bullion and exchange-traded funds (ETFs). Goldman Sachs pointed out that central banks, particularly in Asia, are aggressively adding to their gold reserves as a shield against potential economic shocks. Investor interest in ETFs has also picked up as equity markets remain volatile.

However, gold prices saw a slight pullback on Monday after President Trump eased tensions by announcing tariff exemptions on key electronics like smartphones and computers, mostly imported from China. Spot gold dipped by 0.4% to $3,223.67 per ounce, while US futures eased to $3,240.90.

Despite the short-term dip, long-term sentiment remains bullish. Analysts believe that if macroeconomic risks continue to escalate, especially with fears of a US recession looming, gold may remain a top safe-haven asset throughout 2025.