Gold is trading near $2,990 per ounce after briefly topping $3,000 on Friday, as investors weigh the relief from the U.S. avoiding a government shutdown against lingering concerns about economic growth.
The metal has risen about 14% so far this year, reflecting market volatility tied to trade-policy uncertainty that contributed to the S&P 500 entering correction territory last week.
Major banks expect further gains: Macquarie Group forecasts gold could reach $3,500 per ounce in the second quarter, while BNP Paribas projects average prices above $3,000.
Demand for gold is being supported by several factors. Safe-haven buying remains a key driver amid geopolitical and policy uncertainty, while expectations of slower economic growth and potential shifts in central bank policy have increased interest in non-yielding assets. At the same time, equity market weakness and concerns about trade and fiscal policy have pushed some investors toward gold as a portfolio hedge.
On the supply side, mined output and recycling trends are incremental influences but have not materially eased price pressure. Meanwhile, investor flows into gold-backed exchange-traded funds and physical bullion holdings have helped underpin prices, as portfolio managers and retail buyers allocate to precious metals to diversify risk.
Analysts note that gold’s path will depend on several variables: U.S. economic data, inflation readings, Federal Reserve guidance, and developments in trade and fiscal policy. A softer growth outlook or renewed market stress would likely keep upward pressure on prices, while stronger-than-expected economic indicators and a more hawkish Fed stance could temper gains.
For now, with sentiment tilted toward risk aversion and major banks forecasting higher levels, gold is positioned to remain a favored asset among investors seeking protection against volatility and uncertainty.