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>>Gold Prices Face Growing Upside Risks as Tariff Concerns Intensify, OCBC Alerts

Gold Prices Face Growing Upside Risks as Tariff Concerns Intensify, OCBC Alerts

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about 4 hours ago

Tariff Tensions Revive Gold Upside

Tariff disputes between major economies are reigniting upside risk for gold through 2025. Investors view gold as a safe‑haven amid growing trade‑policy uncertainty. OCBC’s analysis says escalating tariffs boost demand for dollar‑denominated gold. The renewed pressure follows a period of relative commodity stability.

Historical Precedent and OCBC’s Framework

Past trade wars, such as the 2018‑2020 US‑China clash, lifted gold about 30%. OCBC uses a multi‑factor model that blends real‑interest‑rate outlooks, currency volatility, central‑bank reserve moves, and physical demand from China and India. Their baseline scenario forecasts modest price gains, while a full‑scale tariff shock could push prices much higher. The model highlights tariffs as the dominant risk through mid‑2025.

Broader Economic Ripple Effects

Higher gold prices improve mining profitability but raise input costs for jewelry and electronics manufacturers. Central banks may adjust reserve allocations as gold gains appeal over other safe‑havens. Compared with bonds, tech stocks, industrial metals and cryptocurrencies, gold remains the most consistent hedge during trade disputes. OCBC advises close monitoring of policy developments to gauge near‑term volatility.