Gold Prices Hit Record High As Powell Warns Trump Tariffs Could Spur Inflation – Goldman Sachs, Citi Raise Forecasts

Gold prices hit a new high on Thursday after Federal Reserve chair Jerome Powell expressed concerns that President Donald Trump’s tariff policies could drive up inflation and slow down economic growth.

Gold prices in the spot market hit $3,357 an ounce on Thursday before declining to the $3,300 level at the time of writing.

The commodity, considered a safe-haven, has been on a tear this year, gaining almost 28% year-to-date.

Gold crossed the $3,200 mark on Friday last week as the dollar index (DXY) fell to a three-year low.

While the dollar index has remained below the 100-level, gold has continued its rally, surging more than 5.7% in the past week.

Gold scaling a new high comes a day after Powell expressed concerns that Trump’s tariffs were larger in scope than anticipated, and that they could threaten the central bank’s dual mandate of reining in inflation and stimulating economic growth.

This drew a sharp reaction from President Donald Trump, who berated Powell and called his rate actions “too late and wrong.”

Trump has been vocal about wanting Powell to cut rates to stimulate growth.

Amid rising economic concerns, analysts at Goldman Sachs raised their gold price forecast by year-end to $3,700 from $3,300, according to CNBC.

The brokerage cited increased recession risk as one of the factors behind the hike in their gold price forecast, and added that demand from central banks for the yellow metal was also stronger than expected.

Analysts at Citi Research joined the chorus, hiking their gold price forecast to $3,500 from $3,200 over the next three months, according to Reuters.

"We think gold is likely to be in an extremely rare physical deficit at present, meaning prices need to rise in order to get stockholders to sell to clear the market," the brokerage said, explaining that demand is currently outstripping supply.

Trump’s Treasury Secretary, Scott Bessent, sought to address concerns made public by prominent CEOs, saying there would be “clarity on tax and deregulation” over the next 90 days.

Amid rising tariff-induced concerns, the SPDR S&P 500 ETF Trust (SPY) gained 0.9% over the past five trading sessions, while Invesco QQQ Trust (QQQ) declined 0.05% in this period.

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