Gold prices hit all-time high, bullish outlook remains strong

Gold prices hit a record high after the Fed signaled a rate cut, increasing the appeal of gold amid ongoing economic and geopolitical tensions.

At 5:20 a.m. on March 20, spot gold rose to $3,050.94 an ounce, after hitting a record high of $3,057.21 an ounce earlier. US gold futures also rose to $3,059.5 an ounce.

According to Heraeus Metals Hong Kong, the increase in gold prices is mainly due to market instability, geopolitical tensions, a weakening USD and expectations that the FED will cut interest rates in the near future.

The Fed kept interest rates unchanged at 4.25% - 4.50% but forecast two rate cuts by the end of 2025. This further strengthens the position of gold, which is a non-interest-bearing asset but has an advantage when interest rates fall.

President Donald Trump’s tariff policies have exacerbated trade tensions, fueled inflation and hurt economic growth. New tariffs on steel and aluminum, with countermeasures expected in April, are roiling financial markets.

In addition, the instability in the Middle East continues to make investors seek gold as a safe haven asset. Israel's attack on the Gaza Strip on March 18 killed more than 400 people, leading to concerns about escalating hostilities in the region.

Since the beginning of 2025, gold has continuously set 16 record highs, including 4 times exceeding the threshold of 3,000 USD/ounce.

According to MoneyWeek magazine, the three main factors driving gold's rise in 2024 - 2025 include falling interest rates, central bank buying and geopolitical tensions.

Central banks, especially in Russia and China, continue to buy gold to diversify their reserves, increasing demand in the market. In addition, gold is increasingly used in high-tech industries such as AI, nanomedicine and cancer therapy, providing further support for the precious metal.

Gold price forecast

Gold will be further supported by rising inflation, falling interest rates and continued economic uncertainty, according to strategist Joseph Cavatoni of the World Gold Council. He predicts that gold prices could exceed $3,000 an ounce in the long term.

Currencies 4 You expert Prem Raja even believes that if the current rally continues, $4,000/ounce will be the next long-term target.

Goldman Sachs predicts gold prices will rise 8% by the end of 2025. They also predict the Fed will cut interest rates twice this year, helping gold prices continue to rise. If the Fed keeps interest rates unchanged, Goldman Sachs expects gold prices to reach around $3,060 an ounce by the end of 2025.

Mr. Pawan Jain from Virginia Commonwealth University said that by mid-2025, gold could fluctuate between $3,200 and $3,300 an ounce, thanks to demand from gold ETFs and long-term investors.

Despite the generally optimistic outlook, Joseph Cavatoni warned that gold prices could be volatile due to the impact of US monetary and trade policies. He said gold could continue to fluctuate around the $3,000/ounce mark, but did not rule out the possibility of short-term price declines.

Nicholas Frappell, market director at ABC Refinery, also said that gold prices could correct after a strong rally in the first quarter of 2025. However, he stressed that previous corrections were short-lived and buying pressure remains strong. The next important resistance level for gold could be $3,090 - $3,100 an ounce.

If investors believe gold prices will continue to rise through 2025, now is the right time to buy, according to financial advisor Dinon Hughes at Nvest Financial.

He emphasized that gold is not only a short-term investment tool but also a long-term risk-hedging asset. Therefore, instead of paying too much attention to daily price fluctuations, investors should focus on the long-term value of gold in their investment portfolio.

Gold's safe-haven role is being reinforced amid geopolitical uncertainty and rising trade tensions, said OCBC foreign exchange strategist Christopher Wong.

Besides gold, other precious metals also saw notable fluctuations. Silver rose to $33.84 an ounce, platinum rose to $995 an ounce, while palladium fell slightly to $956.35 an ounce.