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.
Related: Major analysts revamp gold price targets after historic rally
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 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.
Related: Billionaire fund manager delivers blunt message on U.S. vs. Europe
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.