Top investment banks Morgan Stanley (MS), Goldman Sachs, and UBS have identified gold as a prime investment opportunity following the Trump administration's recent tariff announcements targeting the EU and key trading partners.

MS analysts highlighted in their latest metals report that a weakening dollar should boost commodities, while rising US inflation could drive capital toward precious metals. Any stimulus measures from China would provide unexpected sector tailwinds. However, fading stockpiling effects and new tariffs pose growth risks to industrial metals. The firm favors gold, silver, and COMEX copper exposure.

The bank expects tariff escalations starting August 1 to increase input costs across steel, aluminum, and copper industries. While Chinese export data continues supporting metal demand, this could wane as temporary tariff suspensions expire. MS projects current metal trends will persist, with upside potential for COMEX copper, gold and silver, though platinum prices may stabilize after surging 50%.

Revised forecasts show gold averaging $3,500/oz in Q3 2025, climbing to $3,800/oz in Q4 2025, then settling at $3,500/oz in Q1 2026. Longer-term projections indicate $3,313/oz in 2026, declining to $2,625/oz in 2027 and $2,500/oz in 2028. Central bank demand, ETF inflows, dollar weakness, and persistent macroeconomic uncertainties underpin the upgraded targets. Jewelry demand may also recover as consumers adapt to higher prices. Key uncertainties remain final tariff levels, Section 232 investigation outcomes, and potential Chinese stimulus.

Goldman Sachs reiterated its year-end gold target of $3,700/oz, forecasting a climb to $4,000/oz by mid-2026. Central bank accumulation and ETF inflows, combined with substantial off-exchange purchases, continue supporting prices. Speculative positioning liquidation has created room for structural buying, while central bank purchases reached 31 tonnes in May through London OTC markets—far exceeding the pre-2022 monthly average of 17 tonnes. Year-to-date official sector buying totals 77 tonnes, slightly below Goldman's initial 80-tonne H1 2026 projection. The firm maintains its long gold recommendation.

UBS views recent tariff escalations as negotiation tactics, anticipating eventual reductions. Despite expecting stabilized US tariffs around 15% (versus announced 30-35%) and potential US-EU trade agreements before August 1, the Swiss bank recommends gold as policy risk insurance. UBS doesn't anticipate Mexican retaliatory tariffs.

Spot gold traded at $3,328.45/oz at 10:45 Beijing time on July 16.