In a Tuesday research note, ANZ increased their gold price prediction to $3.100 for the period of zero to three months and to $3.200 for the period lasting six months.
On Tuesday, gold prices soared above the $3,000-per-ounce mark for the second time ever.
ANZ Bank, quoted by Reuters, stated that “we continue to maintain our bullish outlook for gold, despite strong tailwinds due to escalating trade and geopolitical tensions as well as easing monetary policies and central bank purchases.”
Demand for safe-havens is on the rise
Investors seeking safety amid economic insecurity, fuelled by US President Donald Trump’s aggressive tariff policy, drove this new high.
This policy has sparked fear of a trade war on a global scale, and led to an increase in the demand for safe haven assets such as gold.
Investors are flocking to gold because of the perceived security it offers.
The surge in gold demand is a reflection of the growing anxiety and concern amongst investors about possible economic consequences from ongoing trade conflicts.
EwaManthey, commodities analyst at ING Group said that there has been a lot back and forth about tariffs. This volatility and unpredictability has supported gold prices.
The gold price has risen by over 14 percent this year. This is a record-breaking increase of fourteen times. Gold, the traditional safe-haven asset, has been boosted by ongoing geopolitical instabilities.
Opportunities in silver
Fear of tariffs on imports in gold has caused a tightening of liquidity at the London Spot Market, while supply is flowing to the US. This has triggered an arbitrage, with a wider spread between Comex Futures and London Spot,” ANZ stated.
Silver prices will remain volatile until the supply disruption is resolved.
The demand for silver in the industrial sector will remain high despite the obstacles posed by trade barriers and tariffs.
Silver’s essential role in various industrial applications is responsible for its resilience.
Analysts at ANZ also suggested that the investment demand would be a major driver of price increases for silver.
Silver’s popularity as a precious material is expected to grow, especially for investors who are looking to diversify and protect their portfolios from economic uncertainties.
While tariffs can be a challenge in the short term, long-term, both investment and industrial factors are driving demand for and appreciation of silver.
Silver prices rose by 0.7% on the COMEX at the time this article was written, to $34.530 per ounce.
In the future, silver is expected to trade at between $34-$36 an ounce.
Central banks buy gold
In January, central banks increased their net purchases of gold to 18 metric tons. The yellow metal has continued to be supported by this.
The primary purchasers were emerging market central banks. These included Uzbekistan and China as well as Kazakhstan.
While emerging economies increase their gold reserves faster, the developed economies still hold more gold within their official reserves.
China’s central banks increased their gold reserves in February for the fourth consecutive month.
The move is despite the record high gold price, and more additions are anticipated.
China’s central banks added gold to its reserves for approximately 10 months in a row during Trump’s initial term as US President.
Since the beginning of the Russia/Ukraine war in 2022 central banks have increased their annual purchases of gold from 500 to 1,000 metric tons.
Manthey said that they expect gold to rally in the future, given Trump’s uncertainty on geopolitics and trade, as well as central banks appetite and ETF purchases.
Gold is expected to continue rising in value.
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