The gold price rose to a new record above US$2,940 per ounce last week, and top broker Goldman Sachs reckons this safe-haven asset has more room to run this year.
The Australian Financial Review (AFR) reports that Goldman has raised its end-of-year gold price forecast from US$2,890 per ounce to US$3,100 per ounce.
The gold price is currently trading 0.64% higher at US$2,899 per ounce. Hence, the broker's upgraded forecast means there is a potential 7% upside still in play for investors this year.
The broker said the gold price could go even higher, perhaps up to US$3,300 per ounce, if United States tariffs and other policy uncertainties continue to make the market nervous.
These forecasts are significant given the gold price has risen for a prolonged period.
The gold price rose by 27% last year, which was the commodity's best annual growth since 2010.
Goldman's boosted forecast has obvious positive implications for ASX gold shares.
On Tuesday, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 0.36%.
We're seeing a mixed-bag performance among ASX gold shares today.
The Northern Star Resources Ltd (ASX: NST) share price is $17.87, down 0.22%.
Northern Star's takeover target, De Grey Mining Limited (ASX: DEG), is 0.49% higher at $2.06.
Evolution Mining Ltd (ASX: EVN) shares are up 0.24% to $6.23, and the Newmont Corporation CDI (ASX: NEM) share price is up 0.027% to $73.51.
Perseus Mining Ltd (ASX: PRU) shares are steady at $2.78.
Genesis Minerals Limited (ASX: GMD) shares are up 0.94% to $3.22, and Capricorn Metals Ltd (ASX: CMM) shares are down 0.38% to $7.88.
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Why did Goldman raise its gold price forecast?
The broker has raised its gold price forecast due to stronger demand from central banks.
Trading Economics analysts say the gold price is also strong because traders are "focused on the risk of market disruptions due to U.S. President Donald Trump's tariff threats".
When the market is jumpy, a safe-haven asset like gold looks more attractive. US rate cuts have also helped make the rising gold price a more attractive bet than cash and bonds.
Trading Economics analysts said:
Trump's tariff policies have become increasingly unpredictable due to delays and exemptions, with geopolitical and economic uncertainties boosting gold's appeal as a safe haven.
Softer US retail sales data released last week has raised the prospect of further rate cuts.
Meantime in Australia, the market is awaiting the Reserve Bank's first decision on interest rates. The RBA will announce its decision at 2.30pm today.
