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Overview

Gold prices have soared to a historic high of $2,921 per ounce, fueled by growing market uncertainty following former U.S. President Donald Trump's announcement of a 25% tariff on all U.S. steel and aluminum imports. This has reignited investor demand for safe-haven assets, with gold surging 11% year-to-date. Meanwhile, Citi has raised its short-term target for gold to $3,000 per ounce, maintaining the same target for the next 6-12 months. With gold at these levels, is Barrick Gold $Barrick Gold Corp(GOLD)$   an attractive buy, or is the stock already too expensive?

Gold Prices Surge Amid Global Uncertainty

Gold's remarkable rally can be attributed to escalating trade and geopolitical tensions. Trump's tariff announcement, effective March 4, has reinforced gold’s appeal as a hedge against economic uncertainty. As trade disputes heat up, investors are turning to gold to preserve value.

Furthermore, concerns about U.S. economic policies are mounting. Should inflation surge while economic growth slows, the Federal Reserve’s response will be closely monitored. Powell’s testimony before Congress this week may provide further clues about the Fed's monetary policy stance, which could influence gold prices.

Will Central Bank Demand Continue to Support Gold?

Central banks, particularly China’s, remain active buyers of gold, supporting prices despite their record highs. The People's Bank of China has expanded its gold reserves for the third consecutive month, signaling a continued push toward asset diversification. Additionally, China’s move to allow insurance companies to invest in gold could inject as much as 274 billion yuan ($38 billion) into the market, further driving demand.

If central banks continue accumulating gold, prices may remain elevated in the near term, reinforcing Citi’s $3,000 price target.

Is Gold Too Expensive to Add?

Gold’s recent rally raises the question: Is now the right time to buy more? While short-term momentum suggests further upside, inflation expectations have shifted. The five-year breakeven inflation rate hit 2.64%, the highest level since 2023. If the Federal Reserve slows its easing pace, it could put downward pressure on gold prices.

For investors considering adding gold exposure, waiting for a pullback may be a more prudent strategy rather than chasing the current rally.

At What Price Should You Buy Barrick Gold?

Barrick Gold currently trades at $17.36 per share. While the stock has underperformed relative to gold prices, it remains a top-tier gold miner with strong fundamentals and a solid dividend yield.

Key considerations before buying:

Barrick’s stock tends to lag behind gold price movements, meaning a continued rally in gold could eventually push the stock higher.

Barrick's cost of production remains competitive, making it a solid long-term play on higher gold prices.

If gold surpasses $3,000 per ounce, Barrick’s earnings could see a significant boost.

A reasonable entry point for Barrick Gold could be around $16-$17 per share, where it historically finds strong support. Investors with a longer time horizon may consider accumulating shares at current levels, especially if gold remains elevated.

Outlook and Insights

With Citi's revised short-term gold target at $3,000, gold’s rally may have further room to run. However, inflation expectations and central bank policy remain key risks. If inflation continues to rise while economic growth slows, gold may hold its gains. On the other hand, a more hawkish Fed could trigger a gold pullback.

For Barrick Gold investors, patience may be key. The stock’s underperformance relative to gold prices suggests potential upside, but an entry closer to $16-$17 per share could provide a more attractive risk-reward balance.

Conclusion

Gold's record-breaking rally has sparked renewed investor interest, but buying at these levels requires caution. Barrick Gold remains a strong long-term investment, yet investors may benefit from waiting for a pullback before adding to positions. If gold sustains its momentum, Barrick could see further upside, making it a compelling buy on weakness.

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