Gold Prices Pull Back After Hitting Record High — Analysts See Potential for $3,500 If Recession Hits

Gold Prices Pull Back After Hitting Record High — Analysts See Potential for $3,500 If Recession Hits

Gold prices edged lower on Thursday (March 20) after reaching a historic high, as investors took profits. Despite the dip, the metal remains supported by expectations of U.S. Federal Reserve rate cuts and ongoing geopolitical and economic uncertainty.

Spot gold slipped 0.3% to $3,038.79 per ounce after briefly touching an all-time high of $3,057.21. Meanwhile, U.S. gold futures closed up 0.1% at $3,043.80 per ounce.

Profit-taking weighs on gold, but it remains a safe haven in turbulent markets
Alex Ebkarian of Allegiance Gold noted that hitting a record high often triggers profit-taking. While gold hasn't yet become the go-to safe haven for retail investors, rising uncertainty could increase demand, especially as the global economy shows signs of a slowdown — though not a full recession.

Fed signals rate cuts – Trump criticizes monetary policy
Federal Reserve Chairman Jerome Powell warned that trade policies under former President Donald Trump, including high import tariffs, could slow U.S. economic growth and push inflation higher. Trump, in turn, criticized the Fed’s decision to hold interest rates steady, even as economic data suggests weakening growth.

According to data from LSEG, markets expect the Fed to cut interest rates by a total of 0.5% this year, possibly starting in July.

Citi forecasts gold could reach $3,500 if recession materializes
Analysts at Citi believe that if the U.S. enters a recession and inflation remains high, gold prices could surge to $3,500 per ounce by the end of 2024, driven by rising demand for safe-haven assets.

Conflict in Gaza adds to global uncertainty
The Gaza Health Ministry reported at least 91 fatalities following renewed airstrikes by Israel, marking the end of a two-month ceasefire — further fueling global market concerns.

Other precious metals follow gold's dip
Silver dropped 1.2% to $33.41 per ounce
Platinum fell 1.1% to $982 per ounce
Palladium declined 1.3% to $946.50 per ounce