Gold Set to Achieve Eighth Weekly Gain Amid Increased US Shipments of Precious Metals

Investors Turn to Gold as Safe Haven Amid Economic Uncertainty

Gold is poised to secure its eighth consecutive weekly gain as demand for the safe-haven asset rises. The impetus for this surge comes from concerns over tariffs and a significant price discrepancy between the United States and London, which has driven an increase in shipments of physical gold bars to New York.

On the latest trading day, gold futures were seen hovering around $2,950, slightly retreating from their all-time high achieved earlier, while the spot price in London was approximately $2,930 per ounce. Year to date, gold prices have surged nearly 11%, marking the 11th record high of 2025 earlier this week.

This upward price movement is largely attributed to persistent central bank purchasing, ongoing geopolitical tensions, and uncertainties surrounding potential US tariffs, which may even extend to include precious metals. Earlier comments from President Trump indicated a looming imposition of tariffs on various sectors, including automobiles, semiconductors, and pharmaceuticals, with retaliatory tariffs against countries imposing levies on US products anticipated to roll out in April.

Moreover, the ongoing conflict between Ukraine and Russia continues to exert upward pressure on gold prices as investors seek to hedge against geopolitical instability.

A notable factor contributing to the gold market's dynamics is the widening gap between gold futures prices in the United States and the spot prices in London. This disparity has prompted institutional investors to significantly increase their shipments of physical gold to vaults in New York. According to Bloomberg data, gold inventories on the COMEX futures exchange have soared since November, reaching levels not seen since the pandemic in 2021.

Brett Elliott, director of marketing at American Precious Metals Exchange (APMEX), highlighted the prevailing market fears surrounding gold availability. He noted that institutional investors have begun stockpiling gold as a precautionary measure, responding to concerns that any supply disruptions could lead to an explosive price increase. In light of these conditions, coupled with heightened demand for safe-haven assets, it is expected that gold prices will continue to trend upwards.

Central bank demand for gold reached record levels last year, with a significant acceleration in purchases during the fourth quarter, as reported by the World Gold Council. Joe Cavatoni, a market strategist at the World Gold Council, emphasized the essential role of gold as a diversifier in investors’ portfolios, stating that risk allocation towards gold remains a prominent consideration for many.

The Federal Reserve's rate-cutting cycle from the previous year contributed to higher gold prices, making the non-yielding asset more appealing to investors. Despite a pause in rate cuts and prevailing market uncertainties regarding future monetary policy, Wall Street analysts anticipate further gains for gold throughout the year.

Goldman Sachs recently revised its year-end forecast for gold prices to $3,100 per troy ounce, up from a previous estimate of $2,890, driven by what they describe as "structurally higher" central bank demand, particularly from China. Lina Thomas, a commodity strategist at Goldman, noted that increased demand from central banks could add approximately 9% to gold prices by year-end. She further suggested that if policy uncertainties, including tariff-related fears, persist, gold prices could potentially reach as high as $3,300 per ounce by year-end.

Additionally, a survey conducted by Bank of America revealed that global fund managers believe gold will outperform US equities, ranking as the second-best-performing asset class in 2025, just behind global equities. The surveyed fund managers also indicated that gold would likely excel in scenarios involving a "full-blown trade war," surpassing the US dollar and 30-year bonds in performance.