Veteran analyst who predicted gold prices would rally offers a blunt new forecast

The commodities expert has reset their gold outlook

Apr 16, 2025 - 23:43

Veteran analyst who predicted gold prices would rally offers a blunt new forecast

Gold prices have surged to all-time highs in 2025 thanks to growing economic worry and a tariffs-driven trade war.

So far, gold has soared over 20%, including a 10% gain in April following President Trump’s "Liberation Day" tariff announcement on April 2, rewarding gold bugs handsomely.

Gold's big gains are even more striking when compared to other assets, including stocks and bonds. The S&P 500 is down over 8% this year, and the 10-year Treasury Note yield has climbed to 4.33% from below 4% ahead of the tariff tussle.

The rally has likely surprised many, but long-time commodities pro Carley Garner isn't among them, given her bullishness in 2024.

"Previously, higher interest rates and a higher dollar have been headwinds preventing the yellow metal from pricing inflation and geopolitical risk into valuation, but investors have finally looked past those hurdles," said Garner in April 2024.

At the time, Garner's gold forecast was for the precious metal to rally "until we test the weekly trendline."

Now that gold prices have not only tested — but exceeded — that trendline, Garner has updated her outlook, offering a blunt take on what could happen to the yellow metal next.

*Gold prices are surging in 2025 amid a weakening economy and a growing tariff war.*
Image source: Costaseca/Lucas/AFP via Getty Images

Gold gets tailwinds as economy stumbles, trade war mounts

The U.S. economy may be on the cusp of a reckoning. After notching 3% GDP growth last summer, concerns are mounting as manufacturing and services activity slips, job losses increase, and inflation risks return.

ISM’s manufacturing index dipped to 49 in March from 50.9, and its services index fell to 50.8 from 54 in December. Historically, when those readings drop below 50, it signals a contracting economy.

Cracks also appear in the job market following the most hawkish Fed monetary policy tightening since the early 1980s.

While historically low, unemployment has climbed to 4.2% from 3.5% in 2023, and layoffs in high-paying jobs have become more common. In Q1, more than 497,000 workers were laid off, the largest first-quarter showing since 2009, according to Challenger, Gray, & Christmas.

Meanwhile, March CPI inflation of 2.4% is down considerably from 2022, yet remains above the Fed's 2% target, and could head higher because of tariffs.

The White House has imposed 25% tariffs on Canada, Mexico, and autos and a 10% baseline import tax on almost everything else. In China, a trade war has erupted, lifting U.S. tariffs to a staggering 145%, risking inflation on everything from clothing to electronics.

The uncertain backdrop set the stage perfectly for gold, which tends to perform best when investors search for safe havens amid chaos.

The trade war has investors broadly shunning other typical safe havens, adding additional fuel to gold's rally. The U.S. Dollar and Treasury bonds have sold off, likely at least in part because they're widely held by global central banks that are less willing to finance our economy amid a tussle over tariffs.

Analyst makes bold call on gold market after eye-popping rally

Gold's price surge to over $3,200 has lifted it to all-time highs, which could signal that overly bullish speculators are getting too complacent.

The risk gold bugs have become too offside isn't lost on Garner, whose updated thoughts might frustrate some bulls.

"This is going to be kind of an unpopular opinion, but I do not think it's sustainable," said Garner in a TheStreet interview. "I think the gold market is putting in a bit of a blow-off top."

Blow-off tops happen when prices surge vertically on heavy volume, a move investors consider "parabolic."

"I've seen this price action before this," said Garner. "We're as overbought today as we were in the summer of 2011. And we haven't been this overbought since....But the reality is, when everybody has the same idea, the markets tend to do the other, the opposite."

Garner cites the 80/20 rule as a reason for her concern about what's next for gold prices.

"This is an 80 over 20 game, 80% of speculators. And I'm not talking about investors, I'm talking about speculators. People that are [investing] with hot money that are chasing prices. 80% of those people are generally wrong. 80% of analysts are generally wrong. It's a really tough game to predict what the future is going to hold. And if 80%, which is roughly what our polling suggests, are already bullish gold, the odds are we probably get some sort of surprise to the downside," said Garner.

Wall Street analysts have recently been boosting targets to catch up to rising gold prices. For example, Deutsche Bank targets $3,700 in 2026, up from $2,900 previously.

Garner has a very different conclusion right now:

"If you've made money in the gold market on the way up, please protect yourself, take some off the table, maybe even take all of it off the table and see what happens."