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April 4, 2025Rising Geopolitical Tensions and Tariff Anxiety Propel Gold Prices to Historic Levels
Gold prices recently reached their highest point since 1986, breaking through the psychologically significant USD 3,100 per ounce barrier and recording a peak of USD 3,128.06. Currently trading at USD 3,077, the precious metal continues to reflect robust momentum driven by escalating geopolitical tensions and renewed anxiety surrounding United States tariff announcements. This surge marks the strongest quarterly performance for gold in nearly four decades, with prices climbing 19.3% during the first quarter of 2025 alone.
Sycamine Capital Management – Gold Price
Analysts at Sycamine Capital Management attribute this unprecedented market performance to robust central bank purchasing and heightened safe-haven demand as investors respond to growing uncertainty in global markets. With Goldman Sachs recently raising the probability of a U.S. recession to 35%, investment strategists highlight gold’s resilience and anticipate the potential for even higher price ranges in the coming months.
“The current economic landscape perfectly demonstrates why investors gravitate toward gold during uncertainty,” says Richard Kelly, Director of Private Clients at Sycamine. “Our analysis shows gold’s correlation with stock market indices remains distinctly low, providing significant diversification benefits precisely when portfolio protection is most critical.”
Central bank purchases have played a pivotal role, with institutions acquiring more than 1,000 tonnes of gold annually for three consecutive years. During the last quarter alone, banks significantly increased their reserves, buying 333 tonnes, representing a 54% rise over the same period last year. This sustained buying pressure underscores central banks’ strategic shift away from U.S. dollar assets amid ongoing trade disputes.
Gold’s unique reaction to interest rates further supports its current strength. The firm’s analysts describe this phenomenon as a “smile profile,” indicating that gold tends to appreciate in both rising and falling real yield environments. As tensions escalate over President Trump’s aggressive tariff policies, including reciprocal levies as high as 46% on certain trading partners, market volatility has surged, prompting traders to seek safer investment vehicles.
“President Trump’s focus on tariffs has created considerable market anxiety, pushing gold to fresh highs as investors seek wealth preservation alternatives,” explains a senior market strategist at Sycamine Capital Management. “Our technical analysis indicates gold remains well-supported above USD 2,958 despite recent short-term corrections. These temporary pullbacks often represent ideal entry points for strategic investors.”
Market forecasts remain bullish, with analysts at the firm projecting gold prices to reach around USD 3,300 by year-end 2025. Under more extreme scenarios, particularly with intensified geopolitical instability or deepening economic disruptions, analysts at Goldman Sachs see potential peaks approaching USD 3,500 within the next 12 months.
Sycamine Capital’s assessment also points to significant institutional investment flows into gold-backed ETFs, reaching historic levels with global holdings now exceeding USD 280 billion. This represents a decisive shift toward precious metals, driven by asset managers’ increased allocations aimed at hedging inflation and diversifying portfolios against potential market shocks.
“Gold’s performance during crises remains remarkably consistent,” notes Kelly. “While equities may falter under economic strain, gold has repeatedly delivered positive returns, offering a dependable haven when uncertainty dominates markets.”
As tariff-driven uncertainty persists and geopolitical risk intensifies, the firm underscores the critical role gold continues to play in modern portfolio construction, reinforcing its status as a cornerstone asset in wealth preservation strategies.
About Sycamine Capital:
Sycamine Capital Management Pte. Ltd., founded in Singapore in 2008, stands as a respected global wealth management firm known for its expertise in traditional long-only asset and portfolio management. The firm provides precise market analysis, strategic investment guidance, and personalized financial advisory services aimed at achieving superior investment results for its extensive base of institutional clients and high-net-worth individuals worldwide. Sycamine prioritizes safeguarding clients’ long-term wealth, and financial stability, and enhancing investment potential through disciplined asset management.
For further details or additional insights, please visit https://scmgt.com/sycamine-investment focus-articles/ or contact Simon Lau, Media Relations, at simon.lau@scmgt.com.
