Rising Uncertainty Fuels Gold Demand as Investors Hedge Against Dollar Weakness

Growing economic uncertainty is pushing investors and central banks toward gold, with fears of a weakening U.S. dollar driving demand for the precious metal, according to Daan Struyven, Goldman Sachs’ co-head of global commodities research.

Speaking on CNBC’s Squawk Box, Struyven highlighted that concerns over economic stability and trade policies have led to a surge in gold purchases.

While cyclical commodities like oil are feeling the pressure, gold is benefiting from increased investor interest and aggressive accumulation by central banks.

Gold’s price could climb as high as $3,300 per ounce by the end of the year, with Goldman Sachs’ base case projecting a year-end target of $3,100.

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Struyven noted that investor positioning remains relatively clean despite the rally, as ETF inflows have added 100 tons of demand in just a month.

Meanwhile, central banks continue to ramp up their gold holdings at an unprecedented pace, with purchases in January reaching levels seven times higher than the pre-2022 average.

This rush toward gold reflects growing concerns over the safety of U.S. dollar reserves and Treasury holdings, signaling a broader shift in how investors and institutions are safeguarding their assets.

Alexander Stefanov