Gold's Bull Run Strengthens on Back of Global Instability

With markets rattled by rising geopolitical friction—particularly between the U.S. and China—investors are rapidly shifting their focus to safe-haven assets.

Rising geopolitical friction, particularly between the U.S. and China, has continued to batter markets.

As investors rapidly shift their focus to safe-haven assets in response, analysts at Citi are now forecasting that gold could surge to $3,500.

This bullish prediction comes amid escalating tariffs and growing fears of an all-out trade conflict. The dollar’s recent weakness, combined with surging interest in alternative stores of value, has fueled renewed appetite for gold.

Citi has adjusted its short-term outlook, highlighting strong buying activity from Chinese insurers and intensifying global uncertainty as the key factors driving this move.

The bank also noted the tightening of physical gold supply. With demand accelerating and stockholders reducing their selling activity, prices may need to rise further to release liquidity in the market.

Beijing’s strategy plays a crucial role in this scenario. China’s broader push to reduce dependence on the U.S. dollar has included increasing its gold reserves, often in coordination with BRICS partners.

Recently, Chinese regulators granted permission for a group of insurers to allocate a portion of their investment portfolios to gold, potentially injecting over 250 metric tons of additional annual demand.

As these dynamics converge—policy shifts, macroeconomic volatility, and physical scarcity—gold’s momentum seems far from over. Whether it can reach new highs in the near future may depend on the depth of the divisions in the global financial landscape.