Breaking above $3000 per ounce in gold is not just a price milestone. Joseph Cavatoni, Senior Market Strategist at the World Gold Council (WGC), stated that this is a signal that global investors are reallocating gold amidst rising geopolitical and economic uncertainty.

Cavatoni stated that gold is reaffirming its role as a "risk mitigation asset" amidst global trade tensions, inflation uncertainty, and growing demand for safe haven.

He said, "The rapid rise in gold prices last year is very indicative of the problem. People are returning to gold in order to manage and mitigate the constantly rising levels of risk, whether it is geopolitical risk or direct political risk

So far this year, the gold price has risen by 15%, from $2500 to $3000 in just 210 days, which puts the price three standard deviations above the 200 day moving average. Although technical analysts consider the $3040-3050 range as a recent resistance level, Cavatoni stated that potential demand remains strong.

The inflow of ETF funds indicates the recovery of Western investors

According to the World Gold Council, global gold ETFs had a net inflow of $3 billion last week alone, equivalent to approximately 31 tons of gold. This marks the eighth consecutive week of capital inflows, with North America accounting for the majority of buying. Since the beginning of the year, global net inflows have exceeded $19 billion (207 tons), making the first quarter of 2025 the strongest since 2022.

Cavatoni said, "Risk is everywhere, and investors are actually saying, 'It's time to put money back into risk protected assets.' Of the $19 billion we've seen, about $12 billion has entered the United States

He added that Europe may accelerate its pace in the next six months, especially if the macroeconomic outlook deteriorates or the US dollar further weakens. He pointed out that currently, people are trying to assess whether the strategies being used by the government are beneficial or risky for the economy.

Tariffs and Gold: Strategic Inclusiveness, Not Goals

The reciprocal tariff plan announced by the US government on April 2nd may further enhance the attractiveness of gold. Although Cavatoni stated that imposing tariffs on gold does not pose a direct threat, he emphasized the strategic thinking behind President Trump's recent executive order to include gold in key minerals.

Gold is a currency metal in many ways and plays a crucial role in investment portfolios. Governments understand the value of gold. By definition, this may not be 'critical,' but it has strategic significance. There is a bigger game unfolding

This order is part of the National Defense Production Law, aimed at promoting domestic production of minerals related to national security. The mention of gold indicates that Washington is increasingly recognizing its importance in finance and geopolitics.

Physical gold is still flowing towards the United States

The import volume of gold in the United States remains high. Krishan GoPaul from the World Gold Council cited Swiss customs data, stating that Switzerland's total gold exports in February were 214 tons, with the United States still the largest destination. Since the beginning of the year, Switzerland's gold exports have reached 449 tons, the highest level since 2012.

Cavatoni explained that in the face of uncertain tariffs, traders continue to ship physical gold to the United States to support futures contracts. He said, "Gold needs to continue entering the US market until the question of how tariffs will work is fully clear

Central banks and investment demand from various countries have led this trend

Cavatoni emphasized that the strengthening of gold prices is driven by central banks and investors around the world, not consumers. Due to price increases, jewelry demand in Asia and the Middle East has slowed down, with retailers reporting an increase in jewelry recycling as consumers monetize.

He said, "Investment is showing stronger momentum

He confirmed that at the same time, central bank demand remains strong, and many countries continue to increase their gold reserves. He added, "Some countries even use their gold reserves to support domestic economic conditions

What is the next trend for gold?

Although the World Gold Council has not released a gold price target, Cavatoni pointed out that some analysts believe the next high for gold prices will be $3100 per ounce, or even $3450 per ounce.

He said: "We believe that there are many factors supporting gold in the near future, and the reasons are still very awesome."