Why Gold Could Reach $4,000 This Year

The price of gold has been setting record after record and many investors are now wondering whether the price of an ounce of this precious metal could reach $4,000 this year. After all, it reached $3,000 in March, and now seems to be comfortable at the $3,300 level with no sign of a major drop. We explore what the prospects of this metal are in 2025 and beyond.

Geopolitical instability, economic uncertainty and constantly shifting market conditions have all played a part in driving up the price of gold. In such situations, investors flock to safe haven assets, and gold leads the pack of safe haven assets.

Experts are in agreement that the price of gold is unlikely to drop anytime soon except when something major happens to restore confidence in other asset classes like stocks.

The contradictory messaging coming from the White House, the American debt crisis, the upheaval in global trade due to changing alliances and tariffs, as well as other factors are all influencing investor sentiment and making gold more appealing as an investment vehicle. Monetary Metals’ Ben Nadelstein says capital is flowing to gold since this asset thrives in times of political and economic instability.

Brett Elliot, working at APMEX (a marketplace for metals), says tariff uncertainty is the current biggest driver of the rise in gold’s price. He says the 90-day pause hasn’t taken away concerns about the possible impact of the tariffs on global trade, and gold will keep its momentum to $3,500 and beyond. Given that the price has rallied by at least 3% in a single day on two different days in the recent past, it is feasible that gold is going to reach many more record-setting price levels in the near-term.

While gold could reach the $4,000 price point this year, it may not be an easy feat to achieve. Something major, such as the Fed rate dropping to zero, would need to happen in order to propel the price even further. Elliot says that for gold to reach $4,000, its current price needs to increase by 17%.

Such a rally isn’t something to happen in a matter of days, and the buying pressure is bound to ease at some point as traders take their profits. Historically, gold’s ascent hasn’t been a clear straight line; it climbs for a while, pulls back, climbs some more, and so on.

It should be noted that the price jump seen in April coincided with a significant dip on stock exchanges. This means that a lot of people who don’t normally participate in the gold market flocked in from the stock exchange. The market for gold broadened and could change if other assets regain their allure.

For now, gold is in the limelight, and the current market conditions could be valuable tailwinds for gold-mining companies like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM).

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