As gold futures touched new records on Friday, Goldman Sachs analysts reiterated their bullish call on the precious metal given the looming potential of US tariffs against Mexico and Canada.
“Elevated US policy uncertainty reinforces the diversifying role of commodities in investment portfolios. In particular, we continue to see value in long gold ... as a hedge against several tail risks,” the analysts wrote.
The firm sees tariff escalations and US debt fears as the major risks expected to send gold prices higher.
Bullion futures (GC=F) rose past $2,860 per ounce on Friday, on pace for its fifth consecutive week of gains.
President Donald Trump has said he will impose a first round of tariffs on Mexico, Canada, and China by Feb. 1. Such moves could spark a trade war and impact economic growth.
On Thursday afternoon, Trump reiterated plans to put a 25% tariff on imports from Mexico and Canada.
"A scenario of tariff escalation would further support active investor positioning in gold, adding to the base case support to prices we already expect," Goldman analysts said.
Read more: The latest news and updates as Trump's tariff deadline approaches
The rise in gold comes despite the Federal Reserve's decision to hold rates steady, a move which is typically a headwind for the precious metal as lower interest rates spur more buying of the asset.
Gold is up roughly 6% year to date after gaining over 27% in 2024 on strong demand from foreign central banks and inflows into physically backed gold exchange-traded funds (ETFs).
“We reiterate that long gold remains our highest conviction trading recommendation across commodities, driven by structural (Central Bank buying) and cyclical (ETF buying) factors,” the analysts said, reiterating a $3,000 per troy ounce price forecast for the second quarter of 2026.
Ines Ferre is a senior business reporter for chof360 Finance. Follow her on X at @ines_ferre.
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