Concerns about a U.S. recession combined with renewed tensions in the Middle East have pushed gold above $3,000, setting a new historical high

On Tuesday, March 18, during the Asian market session, gold prices rose again, reaching a record high. This was due to increasing investor concerns about a slowdown in the U.S. economy and escalating tensions in the Middle East, which further highlighted gold's appeal as a safe-haven asset.

Spot gold briefly rose to $3,008.43 per ounce, and as of the time of writing, spot gold was reported at $3,007.06 per ounce. COMEX gold futures peaked at $3,017.8 per ounce, also setting a new record high.

Weak Economic Data, Sounding the Recession Alarm?

The latest retail sales data from the U.S. was disappointing. On Monday (March 17), the U.S. Department of Commerce reported that U.S. retail sales in February rose by 0.2% month-on-month, far below the expected 0.6%, with the previous value revised down from -0.9% to -1.2%, raising concerns about a slowdown in consumer spending.

Following the data release, the yield on 10-year U.S. Treasury bonds fell sharply, boosting gold prices. Recent economic data has shown a deterioration in U.S. consumer confidence and rising inflation expectations, coupled with the unpredictable tariff policies of U.S. President Trump, leading to increasing market concerns about a recession in the U.S. economy.

Renewed Conflict in the Middle East, Rising Safe-Haven Sentiment

In addition to the unsettling economic data, geopolitical risks have also fueled gold's upward trend. Israel stated on Tuesday that it had launched military strikes against Hamas targets in Gaza, which could undermine the fragile ceasefire agreement. Palestinian residents reported multiple airstrikes by Israel in various areas of the Gaza Strip. The escalation of geopolitical tensions undoubtedly increases gold's attractiveness as a safe-haven asset.

So far this year, gold prices have risen over 14%, continuing a strong upward trend into 2024. In recent weeks, several investment banks on Wall Street have raised their gold price targets for this year.

UBS believes that gold prices will reach $3,200 per ounce over the next four quarters. UBS analysts Wayne Gordon and Giovanni Staunovo noted in their research report that the broad reciprocal tariffs and additional industry-specific tariffs planned by Trump to be implemented on April 2 will serve as risk events that stimulate the market's continued search for safe havens.

According to previous reports from Wall Street, Goldman Sachs significantly raised its gold price forecast for the end of 2025, expecting gold prices to reach $3,100 per ounce by the end of 2025, up from a previous forecast of $2,890 per ounce. At the same time, Goldman Sachs' precious metals research team reiterated its investment recommendation to "go long on gold," pointing out that the long-term buying demand from central banks is a core factor driving gold prices higher