Gold Prices Dip; Leading Bank Raises 2025 Price Forecast

 

Gold Prices Dip, But Goldman Sachs Raises 2025 Forecast to $3,700/ozt

(Bullion News Network) – Gold pulled back today in what was a relatively muted Monday trading session. The precious metal lost about $28/ozt but remains above $3,200 per troy ounce. This price move comes on the heels of another record price run, which drove gold to its latest all-time high. Market uncertainty in the wake of President Trump’s tariff proposals has been behind much of gold’s exceptional performance in 2025. American markets are beginning to show life again after the U.S. leader scaled back his tariffs last week, pausing the biggest import fees for 90 days while ratcheting up the pressure in his ongoing trade and tariff war with China. The Dow and S&P 500 both gained to open the trading week, and gold’s drop could be a combination of profit-taking and a minor dip in the market’s appetite for safe haven assets. 

The outlook for gold in 2025 remains strong, according to leading U.S. banks. Investment bank Goldman Sachs raised its 2025 forecast to begin the week and now projects that gold will reach $3,700 by the end of the year. Analysts at Goldman Sachs say that increasing central bank demand for gold and recession-motivated purchasing in the retail sector could drive gold to a new record above $3,700 per troy ounce. Goldman Sachs’ forecast also features a strong upside and downside, with the total projection range jumping to $3,650-$3,950, Reuters reports. The bank says that its projection for gold’s end-of-year price jumps to $3,880/ozt if a recession occurs but could fall to $3,550/ozt if the White House secures enough growth to stave off a recession and inject more certainty into markets. 

Also looming large for gold traders is the Federal Reserve’s next meeting, which is scheduled for May 7th. Federal Reserve Chair Jerome Powell suggested last month that the FOMC is waiting for more information before deciding on how to approach its policy decisions, including rate cuts. President Trump’s tariffs, Powell said, are likely to impact both the U.S. inflation rate and the timeline the FOMC employs as it targets a soft landing and works to bring inflation down and employment up. The economist conceded in a March press conference that measuring the inflationary impact of sweeping tariffs is a difficult task – but one that the Fed is equipped to handle. 

Speculation surrounding interest rate cuts tends to impact the gold market. In 2024, swirling rumors of rate cuts from the Fed drove gold to several all-time highs. With no rate cuts yet in 2025, gold’s highs have been largely motivated by geopolitical and economic uncertainty, particularly with regard to the White House’s sweeping slate of tariffs on major trade partners. If the Fed introduces more rate cut speculation into the market, it could be a busy year for gold traders contending with several major sets of demand drivers. 

CME FedWatch currently projects a 19.8% chance that the Federal Reserve will move to cut rates by 25 basis points at its May 7th meeting. This forecast is up from 18.8% on Friday but down from 38.5% last Monday. Analysts anticipate that the FOMC will be carefully watching the next Personal Consumption Expenditures (PCE) index, as well as labor market and consumer sentiment data, in order to make a decision concerning the target federal funds rate.