Gold is on a tear — and might have even further to run

• Gold prices hit a new high in New York of almost $3,150 an ounce.
• Rising demand for bullion has been driven by tariff uncertainty and economic slowdown fears.
• Analysts predict further price increases, with forecasts as high as $3,500 an ounce.

Gold is on a tear, hitting a record high in New York on Monday at almost $3,150 an ounce to bring the rise this year to 19%.

The increase comes after President Donald Trump announced a 25% tariff on all imported passenger vehicles and key car parts last week, with more levies expected to be announced on Wednesday.

Gold passed the $3,000 threshold for the first time in March as fears of an economic slowdown, tariff uncertainty, and central bank purchases drive up demand.

Analysts at Bank of America think gold could hit $3,500 an ounce if demand increases by 10%.

Analysts led by Michael Widmer, head of metals research, said in a note that rising demand could come from China's insurance industry investing up to 1% of its assets in gold — the equivalent of about 6% of the yearly gold market — along with central banks raising their gold reserves to more than 30%, up from 10%; and retail investors buying more too.

"Uncertainty around Trump Administration trade policies could continue to push the dollar lower, further supporting gold prices near-term. In our view, a broad rebalancing of America's twin deficits could be bullish gold too," they wrote.

Underlying momentum

Analysts at Macquarie Group also think gold could rise as high as $3,500 as soon as during the third quarter. Goldman Sachs is projecting $3,300 by the end of the year, while Morgan Stanley predicts a range of between $3,300 to $3,400.

"Another key reason why gold prices are still rising to new record highs is because of underlying momentum in the gold price, which is causing speculators to bid the gold price higher for short-term profits," Levi Donohoe, director of London-based bullion dealing company Auronum, told Business Insider.

"The immediate technical target in the short term is $3,200 per ounce, suggesting that the buying of gold at these levels will continue into the summer."

"As 'Liberation day' nears, the yellow metal's momentum roars into overdrive, spurred by investors seeking solid ground amid shifting ground," said Ahmad Assiri, a research strategist at Pepperstone. "An uptick in inflation chatter seems to add more fuel to the rally, sending gold deeper into beast mode."

"While other asset classes battle uncertainty, gold's swift ascent has overshadowed the usual market buzz, with traders watching its every move."

John Reade, senior market strategist at the World Gold Council, said gold's rally was evidence of its enduring role as a safe-haven asset. The focus would now be on whether it can stay above $3,000, he added.

Bullion bears

However, not everyone thinks gold will continue to glister. Jon Mills, an equity analyst at Morningstar, believes bullion could fall to $1,820 an ounce over the next five years — a drop of more than 40%.

He told BI last week that a higher supply of gold, lower demand from investors and central banks, and traditional signs a peak is nearing, including more deals in the gold industry, booming M&A activity, and a recent proliferation of gold-based funds, all point to spot prices going down.