Gold Eyes $3,500 Milestone in 2025 as Global Tensions Fuel Demand
With geopolitical tensions boiling over in April, global investors are increasingly turning to safe-haven assets, and gold is back in the spotlight. The economic standoff between the United States and China appears to be escalating, with both nations imposing tit-for-tat tariffs that have left markets on edge. Amid the turmoil, Citi has made a bold move: it’s raised its short-term gold price target to $3,500 as demand for the precious metal surges.
Gold’s Rise Amid Global Uncertainty
So far, 2025 has been anything but calm. From economic friction to political unrest, investors are seeking stability wherever they can find it. Gold, long viewed as a financial safe harbor, has been reaffirming that status in a big way. As uncertainty swirls around currency values and trade agreements, gold’s steady climb seems far from over.
The big question now: how much higher can gold go?
According to Citi analysts, quite a bit. The firm now projects gold to reach $3,500 in the next few months—a significant bump from its previous $3,200 forecast.
What’s Driving the Surge? Citi’s updated outlook stems from several converging factors. One of the most critical? A spike in gold buying from China, particularly by insurance companies now permitted to invest up to 1% of their assets in the metal. That new policy alone could boost annual gold demand by over 250 metric tons.
Moreover, concerns over trade-related instability have injected fresh volatility into markets. Citi’s analysts point out that this, combined with a potential shortfall in physical gold supply, is setting the stage for further price acceleration.
“We believe the gold market is currently in a rare physical deficit,” Citi said. “This means prices need to climb to incentivize holders to sell and help balance the market.”
In other words, there simply isn’t enough gold available to meet the rising demand, at least not at current prices.
A Strategic Shift Away from the Dollar
China’s recent moves are also part of a broader strategy to reduce reliance on the U.S. dollar. Alongside its BRICS partners, the country has been stockpiling gold steadily over the past two years as part of a sweeping “de-dollarization” effort. That trend is now accelerating, as institutional investors pivot towards assets perceived as more resilient in times of global instability.
What’s Next?
With growing demand, a tightening supply, and geopolitical risks showing no signs of easing, gold may be poised for even more record-breaking highs in the near term. Citi’s revised target of $3,500 reflects not just a technical forecast, but a growing consensus that gold is once again king in uncertain times.
For investors seeking safety, gold may prove to be more than just a hedge. It could be the heavyweight champion of 2025.
