Gold Price Dips Slightly, but Brokerages Raise Target Price: Here’s Why

Gold Rate Today: The price of the yellow metal dipped marginally on Monday after Trump announced tariff exemptions on certain goods, including smartphones, laptops, and other electronics. The move eased investor concerns about a prospective trade war. The announcement came just a few days after Trump declared a 90-day pause on new tariffs, excluding China, thereby intensifying concerns over tit-for-tat moves by the Dragon.

According to Goodreturns, the rate of 24-carat gold (per 10 grams) stood at Rs 95,810 price level, witnessing a slight hit. However, this hasn't stopped big institutions from betting big on the commodity, which touched another all-time high-level last week. Major brokerages like Goldman Sachs and UBS have once again raised their gold target price for this year.

Gold Rush Again?

Just last week, Goldman Sachs once again raised its year-end gold target price to $3,700. This is the third time the financial institution has raised its gold forecast this year. While the yellow metal did witness a brief period of sell-off as panic rose after Trump's April 2 tariff announcement, gold made a robust comeback later. Despite investors flocking to book profits, inflows into gold-backed ETFs remained strong alongside continued demand from central banks.

Gold has outpaced the return rate of all other asset classes this year, with equities still struggling. The yellow metal has risen by about 23% so far. Meanwhile, China's tit-for-tat tariff move has heightened concerns around trade tensions between the world’s two largest economies. While the US increased its tariff on Chinese imports by 145%, China has retaliated with a 125% tariff.

Recession Concerns Looming?

“The case for adding gold allocations has become more compelling than ever in this environment of escalating tariff uncertainty, weaker growth, higher inflation and lingering geopolitical risks,” UBS strategist Joni Teves reportedly said in a note.

Some Wall Street analysts are already bracing for a possible recession ahead. This trend was evident last week as US markets crashed and Asian markets followed suit. However, that hasn't stopped institutions from making big bets on gold. Swiss bank UBS has already raised its gold forecast for this year to $3,500 an ounce, up from $3,200.