On Monday, gold prices surged beyond the unprecedented $3,100 per ounce threshold, spurred by escalating apprehensions surrounding the U.S. President Donald Trump’s tariff policies and their possible economic repercussions, coupled with intensifying geopolitical tensions. This scenario prompted investors to flock to the precious metal, renowned for its safe-haven status.
Spot gold catapulted to an all-time peak of $3,122.22 per ounce. With a remarkable increase exceeding 19% since the beginning of the year, gold has frequently breached record levels, solidifying its position as a shield against economic instability and geopolitical unrest.
Goldman Sachs anticipates that by the year’s end, gold price will reach $3,300/oz instead of $3,100 in its earlier forecast. However, the American investment noted that in an extreme tail scenario, the price could hit $4,500 within the next 12 months.
Goldman ran a hypothetical “extreme tail scenario” where factors like concerns about the US Federal Reserve and reserve policies significantly boost demand for gold. The firm suggests that under such unlikely conditions, gold prices could potentially surge to over $4,200 per troy ounce by the end of 2025 and even higher within the following year, possibly $4,500 within the next 12 months.
The firm stated that this is a low-probability event but highlights the substantial, nonlinear potential for gold price increases in such circumstances. This potential upside, combined with moderate price volatility, makes long gold call options appear attractive.
