Gold (GC=F) hit new highs on Thursday as concerns of an escalating trade war heightened.
Futures touched their 17th record of the year just north of $3,060 after President Trump’s auto tariff announcement on Wednesday stoked further fears of a trade war.
A move lower in the US dollar (DX-Y.NYB) index also helped drive prices higher.
Earlier this week, analysts at Bank of America raised their price target on gold to $3,500 per ounce over the coming 18 months if investments increase by 10% due to more buying from China, central banks, and continued purchases of physically backed ETFs.
“Uncertainty around Trump Administration trade policies could continue to push the USD lower, further supporting gold prices near-term,” BofA analysts wrote in a note to clients. “In our view, a broad rebalancing of America’s twin deficits could be bullish gold too.”
The researchers cited gold’s surge above their $3,000 price target, as “a confluence of factors, mostly driven by the Trump Administration’s economic policy mix, have pushed investors to increase their allocations to the yellow metal.”
Wall Street analysts have been playing catchup, as many $3000 calls for gold came early this year. Macquarie Group recently predicted the precious metal will touch $3,500 in the third quarter.
Year to date, gold is up 17%.
