The price of gold hit a new all-time high this week, going over $3,170 an ounce, ahead of President Trump’s announcement on reciprocal tariffs. The speed at which the precious metal’s price has risen is notable according to analysts, given that this is its best quarterly performance in decades.
Researchers at JPMorgan have determined that in 210 days, the price of gold has risen to $3,000 per ounce from $2500. This is quicker than prior increments of $500, which took about 1700 days on average.
Over the last 12 months, gold has seen its price increase by over 40%, with year-to-date prices having risen by 19%.
In a note, strategists and researchers at Societe Generale stated that gold had become a momentum trade since early last year, explaining that the metal was driven mainly by momentum and less by fundamentals. They added that they expected this dynamic to remain intact, with the precious metal’s price hitting $3,300 by the end of the year.
This sentiment was echoed by analysts at Goldman Sachs, who also increased their end of year price target for gold to $3,300. They noted that the change represented continued strong demand for gold from central banks and positive ETF inflows. In addition to this, the multinational investment bank and financial services firm indicated possible events that could create better investor entry points and trigger the selling of gold.
Lina Thomas, a commodities strategist at the firm, posited that a peace deal between Russia and Ukraine could spark speculative selling. She added that the margin-driven liquidation of gold could also be triggered by a sharp equity sell-off, noting that this would be short-lived though.
Over the near term, how the price of gold moves depends on the specifics of the announcement to be given by President Trump on “Liberation Day”.
Trump explained that the reciprocal tariffs to be imposed on imports from other countries would help encourage domestic manufacturing and reduce reliance on foreign imports. In addition, he continued, these taxes could also raise revenue for the federal budget. Some of the tariffs include a 25% tax on all imported automobiles and parts.
A market analyst at XS.com, Linh Tran, revealed that information related to tariffs had already affected the price of gold this last week. Tran added that if Trump prolonged the implementation of these tariffs, the market could witness a short-term gold correction as investors raked in profits following a strong rally.
As gold continues its rally, investment interest is likely to be directed to gold stocks like Torr Metals Inc. (TSX.V: TMET) as more investors look to benefit from the promise of higher returns that come from holding gold-linked shares.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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