Gold is having a stellar year — and its surge may not be over yet.

Gold prices are on an impressive trajectory, with Goldman Sachs recently raising its year-end forecast to $3,700 per ounce. This revision reflects the rising demand from central banks and sentiments surrounding a potential recession. The bank's analysts expect gold to trade between $3,650 and $3,950 an ounce, parameterized by market conditions, which remain uncertain. With a projected 45% chance of a recession occurring in the U.S. within the next year, gold is positioned to act as a critical hedge against potential economic downturns. The commodity reached a record high of $3,245 recently, indicative of a broader trend where gold maintains appeal as a safe-haven asset amidst market instability, especially following the recent US-China trade tensions. In fact, UBS has also adjusted its price target for gold upward, now forecasting $3,500 for 2025, reflecting the increased macroeconomic fears that investors are contending with. The underlying factors suggest that, despite short-term fluctuations, gold's long-term trajectory remains positive due to high demand and limited supply flexibility. Analysts emphasize that the current economic landscape necessitates an allocation toward gold, especially for risk-averse investors looking to safeguard their portfolios. Overall, as market volatility persists, gold stands out as a resilient asset to navigate uncertain times.