The bulls are out in force and people are lining up at the vaults as gold rallied to an all-time high of US$2,938/oz on Wall Street; the market reacting to United States President Donald Trump’s blanket 25% levy on all aluminium and steel imports.
For the past 12 months gold has been the best performing asset class rising 44%, double that of the well-performing S&P 500.
Demand for precious metal is surging again still as rising trade tensions have raised concerns about global economic growth.
ANZ Research says this is being compounded by concerns that gold may get caught up in the tariff war.
“So much so that the one-month gold lease rate has jumped to about 4.7% while there is a week-long queue to withdraw metal from vaults in London.
“Any sign of lease rates falling would suggest investors’ concerns about the impact of tariffs are easing.”
Big banks on Wall Street see gold touching US$3,000/oz by the end of this year and beyond:
- JPMorgan: US$2,950/oz end of 2025
- Goldman Sachs: US$3,000/oz by mid-2026
- Citigroup: US$3,000/oz end of 2025
An undercurrent of record bullion buying by central banks is also boosting the gold price, having purchased over 1,000 tonnes of gold for the first time ever in 2022, and again in both 2023 and 2024, according to the World Gold Council.
The heaviest buyer was The People’s Bank of China - accounting for a staggering 43% of gold purchases in November alone as it looks to build a value barrier against inflation.