Gold prices held steady on Thursday, hovering near the record high hit the day before, helped by expectations of further U.S. rate cuts and political uncertainty.
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Amid global economic turbulence, the prices of precious metals have been climbing higher and higher.
The price of gold in particular has skyrocketed over the past year, rising more than 50%. For midsize jewelry companies aiming to offer fine gold necklaces, earrings and more at lower price points than legacy luxury jewelry brands, gold futures could be spelling trouble.
Though gold is often subject to market fluctuations, investors have been increasing their holdings over the past year over recession fears and market uncertainty, according to Goldman Sachs. Gold is on pace for its third straight year of double-digit gains, even hitting record highs this week during the government shutdown.
On Tuesday, gold prices hit $4,000 an ounce for the first time in history — and they’re showing no signs of slowing down.
Analysts from UBS wrote last week that lower interest rates, weakness in the dollar and political uncertainty will only continue to drive the price of gold higher.
“We now expect inflows for this year to be 830 metric tons, which is almost double our initial forecast of 450 metric tons at the start of the year,” the UBS analysts wrote in a note. “The key risk for gold is better U.S. growth and if the Fed is forced to raise rates due to inflation-related upside surprises.”
A Goldman Sachs report from late last month predicted the climb, forecasting that the price of gold will rise 6% through the middle of 2026 to $4,000 per troy ounce, a unit of measurement used for precious metals. The report categorized buyers of gold into two groups: conviction buyers, who purchase the metal consistently, and opportunistic buyers, who jump in “when they believe the price is right.”
The analysts said they expect central banks to continue buying gold for three more years.
“Our rationale is that emerging market central banks remain significantly underweight gold compared to their developed market counterparts and are gradually increasing allocations as part of a broader diversification strategy,” analyst Lina Thomas wrote.
And according to July survey data from the World Gold Council, roughly 95% of central banks expect global gold holdings to rise in the next year.
Gold futures
That uncertainty comes on top of an already turbulent global economy reeling from changing tariff policies from President Donald Trump. Though he made clear in August that gold will not be tariffed and that bars from Switzerland will not be subject to the country’s 39% tariff, Trump’s steep rates on other countries have been disrupting the global supply chain.
For jewelers, the rising price of the precious metal may be a cause for concern. Large retailers like Pandora and Signet have signaled that they are exploring price hikes or alternative manufacturing methods to…
Read More: Gold prices keep rising, and jewelry companies are sounding the alarm
