Goldman Sachs Raises Gold Price Forecast 2025 to $3,700 Amid Recession Fears, Central Bank Buying, & Trade War

Due to recession concerns and stronger-than-expected central bank demand, Goldman Sachs increased its end-2025 gold price estimate from $3,300 to $3,700 per ounce, with a forecasted range of $3,650 to $3,950.

The bank said in a note dated Friday, "If a recession occurs, ETF inflows could accelerate further and lift gold prices to $3,880 per troy ounce (toz) by year-end," reported Reuters.

"That said, if growth surprised to the upside on reduced policy uncertainty, ETF flows would likely revert to our rates-based predictions, with year-end prices closer to $3,550/toz," the bank stated.

International Gold Price

On Monday, spot gold prices reached yet another all-time high of $3,245.42 an ounce, but they lacked direction as the market took in the continuing tariff story.

Impact of US-China Trade Tension

The increase in costs and demand coincides with growing trade tensions between the United States and China. Beijing responded with retaliatory tariffs of up to 125% on American goods after the US increased its taxes on Chinese imports to a total of 145%.

President Donald Trump warned that levies were still likely at some time, despite the White House's exemption of laptops and smartphones from "reciprocal" U.S. duties. In recent months, several significant central banks around the world, especially in Asia, have increased their gold purchases. This pattern illustrates rising fears of a U.S. recession, particularly in light of the Trump administration's increased economic uncertainties.

U.S. President Donald Trump declared his intention to apply high "reciprocal" tariffs to important trading partners. There is already a universal 10% tax in place, despite the 90-day delay in implementation. Future targeted levies on electronics and pharmaceuticals were also announced by the administration.

Additionally, the bank increased its central bank demand assumption from 70 metric tons per month to 80 metric tons.

Movement in Silver, Platinum, and Palladium

Precious metals saw mixed movements in recent trading. Spot silver experienced a notable decline, dropping over 1 percent to settle at $31.91 per ounce, reflecting a pullback after recent highs. In contrast, platinum prices edged higher, gaining 0.6 percent to reach $948.45, supported by steady industrial demand and investor interest. Palladium also moved upward, rising by 0.8 percent to $922.98 per ounce, possibly driven by supply concerns and short-term speculative buying. The divergence in these metal prices highlights varying market sentiment and differing fundamentals influencing each asset. Investors are closely watching economic signals for further direction in the precious metals market.

Current Gold Rate in India

The price of gold has skyrocketed in India, with 10 grams of 24-carat gold now costing Rs 93,350. The price of 10 grams of actual gold surpasses Rs 96,000 when the 3% Goods and Services Tax (GST) is added. Gold futures on the Multi Commodity Exchange (MCX) hit a record high of Rs 93,940 on Friday due to robust buying sentiment as US-China geopolitical tensions increased.