Gold to Hit $3700? ETFs in Focus
Goldman Sachs has raised its year-end 2025 price forecast for gold to $3,700 per ounce, up from the previous estimate of $3,300, citing stronger-than-expected demand from central banks and increased investment flows into exchange-traded funds (ETFs) amid rising recession fears, as quoted on Reuters. The bank now expects gold to trade in a range of $3,650 to $3,950 per ounce this year.Recession Risks Could Push Gold HigherAccording to a note released Friday, Goldman Sachs warned that if a recession materializes, ETF inflows could surge even further — potentially pushing gold prices to $3,880 per troy ounce (toz) by the end of 2025.Note that Wall Street economists maintained their forecasts for a slowdown in U.S. economic growth and cautioned that the recession risk is still high, despite the Trump administration’s latest decision to delay major tariffs on a wide range of trading partners.Conversely, if economic growth surprises to the upside due to reduced policy uncertainty, ETF flows would likely slow, keeping prices closer to $3,550/toz by the year-end.Market Reaction Mixed Amid Tariff HeadlinesSpot gold prices reached yet another record high on April 14, climbing to $3,245.42 per ounce. However, prices showed limited direction as investors digested the latest developments in U.S. trade policy.There is confusion regarding the tariffs on electronics. Although the White House exempted smartphones and computers from its list of “reciprocal” tariffs, President Donald Trump later indicated that new levies could still be imposed down the line.Central Bank Buying Revised HigherGoldman Sachs also revised its estimate for monthly central bank gold purchases, increasing its assumption to 80 metric tons per month from 70 tons previously.Fed to Remain Dovish?The Fed has been acting dovish currently and is likely to maintain the same stance ahead. If this is not enough, Boston Fed President Susan Collins stated on April 11 that the Federal Reserve is prepared to act if market conditions deteriorate. She emphasized that the Fed has acted quickly in the past and would do so again to ensure market stability. This could be good news for gold prices as gold investing thrives in a low-rate environment.U.S. Dollar to Remain Subdued?The US Dollar Index lost 3.1% last week, signaling weaker confidence in domestic assets. Invesco DB US Dollar Index Bullish Fund (UUP) was off 2.8%. If the U.S. economy continues to face reciprocal tariffs from trading partners, the U.S. dollar has a high chance of further underperformance. Since gold is priced in the greenback, a low U.S. dollar bodes well for the yellow metal.ETFs in Focus Against this backdrop, investors can play gold-bullion-based exchange-traded funds (ETFs) like SPDR Gold Shares GLD, iShares Gold Trust IAU, SPDR Gold MiniShares Trust GLDM, abrdn Physical Gold Shares ETF SGOL and VanEck Merk Gold ETF OUNZ. These ETFs have gained around 20% so far this year (as of April 11, 2025). Even after this rally, investors can stick to gold ETFs, given Goldman Sachs’ latest prediction about gold prices. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR Gold Shares (GLD): ETF Research Reports iShares Gold Trust (IAU): ETF Research Reports abrdn Physical Gold Shares ETF (SGOL): ETF Research Reports SPDR Gold MiniShares Trust (GLDM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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