Goldman Sachs, a leading global investment bank, has revised its year-end gold price forecast upwards to $3,700 per ounce, according to a Reuters report. 

This adjustment reflects a more bullish outlook on the precious metal, primarily driven by two key factors: stronger-than-anticipated demand from central banks and increased inflows into gold-backed Exchange-Traded Funds (ETFs). 

These trends are further fueled by growing concerns over potential recession risks.

Central banks around the world have been actively accumulating gold reserves, contributing to a significant surge in demand. 

This strategic move is likely motivated by a desire to diversify their holdings and hedge against potential economic downturns. 

Additionally, heightened uncertainty and market volatility have prompted investors to seek refuge in safe-haven assets like gold, leading to increased inflows into gold ETFs.

The looming threat of a recession has further amplified gold’s appeal as a store of value. 

Analysts at ING Group said:

Investors continue to rush towards the yellow metal amid intensifying trade tensions.

Investors often turn to gold during economic downturns due to its ability to retain value and act as a hedge against inflation. 

Central bank gold demand

The investment bank has revised its central bank demand forecast upwards from 70 to 80 tonnes per month. This new projection significantly surpasses the pre-2022 baseline of 17 tonnes and has led the bank to raise its year-end forecast from $3,300 per ounce for gold.

Economists at the bank have given a 45% probability of a US recession occurring within the next 12 months. The bank also observed that recessionary fears have led to increased gold ETF inflows.

Gold prices on COMEX have hit multiple record highs so far this year. Prices have risen more than 23% since the start of January. 

At the time of writing, the most-active gold contract on COMEX was at $3,238 per ounce, slightly lower than the previous close. It had hit a fresh record high of $3,261.55 an ounce earlier on Monday. 

Goldman Sachs’ recent analysis indicates that their upwardly revised gold price forecast could still be exceeded in the medium term. 

Further appreciation in gold

Several factors contribute to this potential for further price appreciation. 

Notably, the bank highlights the impact of central bank gold purchases. Should central banks continue to buy an average of 100 tonnes of gold per month, Goldman Sachs’ model suggests that the price of gold could surge to $3,810 per ounce by the end of 2025. 

This forecast underscores the significant influence that central bank buying has on the gold market and points to the possibility of a substantial price rally in the coming years.

Meanwhile, in the event of a recession, ETF inflows could return to pandemic levels, potentially driving ETF prices towards $3,880 per ounce by the end of the year, the bank added. 

Goldman Sachs stated that if economic growth exceeds expectations due to reduced policy uncertainty, ETF flows would likely return to their rates-based prediction, with year-end prices closer to $3,550 an ounce, the investment bank said. 

China ETFs

Chinese gold ETF inflows hit a new daily record late last week, according to recent reports.

Bloomberg data shows that nearly 3 billion yuan (US$410M) flowed into China’s four major gold ETFs on Thursday, setting a new record.

The Weekly Commodity Futures Trading Commission’s weekly data revealed that managed money net longs in COMEX gold fell for the third week in a row, dropping by 38,088 lots to 138,465 lots as of April 8. 

This indicates that speculative interest in COMEX gold futures remains low, analysts at ING said.

That’s the biggest weekly decline since 3 October 2023. Some of the selling could reflect meeting margin calls in other assets, given the recent volatility in broader markets.

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The aspiration for an iPhone bearing a ‘Made in the USA’ label is a recurring theme in American political discourse, yet the practical hurdles remain as formidable today as when the late Steve Jobs bluntly dismissed the idea to President Barack Obama over a decade ago.

While the occupants of the White House and Apple’s corner office have changed, the complex realities of global manufacturing continue to challenge the ambition.

Following the imposition of steep “reciprocal tariffs,” the Trump administration has reiterated its belief that the US possesses the workforce and resources to build iPhones domestically.

However, neither Apple CEO Tim Cook nor the tech giant itself has publicly endorsed this vision.

Instead, industry analysts paint a picture where shifting iPhone production stateside ranges from prohibitively expensive to outright impossible.

The price of patriotism: sticker shock for a US-made iPhone

Estimating the cost of such a theoretical shift yields sobering figures.

Wamsi Mohan, an analyst at Bank of America Securities, calculated in a recent note that labor costs alone could inflate the price of an iPhone 16 Pro (currently $1,199) by 25%, pushing it towards the $1,500 mark.

Wedbush analyst Dan Ives offered an even starker projection shortly after the latest tariff announcement, pegging a potential US-made iPhone at $3,500.

His estimate factored in a hypothetical $30 billion investment over three years needed just to move 10% of Apple’s supply chain to the US.

This financial chasm reflects Apple’s deep integration with global, particularly Chinese, manufacturing.

Currently, over 80% of Apple’s products are made in China, goods now subject to a hefty 145% import tariff under the new rules.

Experts universally agree that relocating this intricate network faces immense challenges, making the prospect highly unlikely in the near term.

“I don’t think that’s a thing,” quipped Needham’s Laura Martin on CNBC, echoing Wall Street’s long-held skepticism.

Jeff Fieldhack, research director at Counterpoint Research, was more direct: “It’s just not a reality that on the time frame of imposing tariffs that this is going to shift manufacturing here. It’s pie in the sky.”

Beyond borders: the intricate web of global manufacturing

Apple, while designing its products in California, relies heavily on contract manufacturers like its top supplier, Foxconn.

Replicating Foxconn’s massive, highly efficient Chinese operations in the US presents multiple obstacles.

Even securing a partner willing to build US assembly plants would require years of construction and investment, all under the shadow of potentially shifting trade policies that could render such facilities economically unviable.

The most significant hurdle, however, lies in the workforce.

The Trump administration views the potential for mass employment as an attraction, with Commerce Secretary Howard Lutnick envisioning “the army of millions and millions of human beings screwing in little screws to make iPhones” migrating to America.

Yet, the scale and nature of the labor force required clash with US realities.

The human equation: labor costs, scale, and skills divide

Foxconn operates vast campuses in China, complete with worker dormitories and transport, enabling rapid scaling of its workforce, often drawing temporary labor from surrounding regions.

This system allows employment to surge seasonally – crucial for meeting the intense demand preceding new iPhone launches each fall – helping Apple produce over 200 million units annually.

Last fall, Foxconn reportedly hired 50,000 extra workers at just one factory for the iPhone 16 ramp-up.

This operational model, however, has faced scrutiny over working conditions, including grueling hours and pressure for overtime, highlighted tragically by worker suicides in 2011 that led to safety nets being installed around buildings.

Crucially, the cost of labor differs dramatically. During the iPhone 16 surge, the reported hourly wage in China was 26 yuan ($3.63), plus a signing bonus equating to roughly $1,000.

In contrast, California’s minimum wage stands at $16.50 per hour.

Bank of America’s Mohan estimated US-based assembly and testing labor would cost $200 per iPhone, compared to $40 in China.

Beyond cost and scale, Apple CEO Tim Cook has previously cited a skills gap.

In a 2017 interview, Cook lamented the lack of sufficient tooling engineers in the US – specialists essential for translating complex digital designs into physical manufacturing processes.

He illustrated the disparity starkly: a meeting of such engineers in China could fill “multiple football fields,” while gathering enough in the US would struggle to fill one.

“The reason is because of the quantity of skill in one location, and the type of skill it is,” Cook explained regarding Apple’s China production footprint.

Echoes of ambition: lessons from Wisconsin and beyond

Recent history offers cautionary tales. A high-profile 2017 announcement by Foxconn, championed by Trump, promised a $10 billion investment and 13,000 jobs for advanced manufacturing plants in Wisconsin.

Though Apple was never officially linked, Trump claimed Apple would build “big beautiful plants.”

The project ultimately faltered, scaled back dramatically, producing face masks during the pandemic instead of electronics, and created only a fraction (1,454) of the promised jobs. Most of the facility remains unbuilt.

Apple and Foxconn did successfully expand iPhone production to Brazil in 2011, primarily to circumvent high import duties there.

While that plant operates today, it highlights another challenge: even with local assembly, most components were still imported from Asia.

Four years after its announcement, Brazil-made iPhones reportedly retailed for double the price of their Chinese-made counterparts.

A more positive, albeit limited, example exists with Taiwan Semiconductor Manufacturing Co. (TSMC), Apple’s main chip supplier.

TSMC recently began producing small quantities of advanced chips at a new factory in Arizona, with Apple as a key customer, demonstrating that some high-tech manufacturing can be established in the US, though it remains a complex and costly endeavor.

A global jigsaw: the challenge of sourcing components

Even if final assembly were feasible in the US, the iPhone itself is a global product.

Key components originate worldwide: processors from TSMC in Taiwan, displays from South Korean firms like LG or Samsung, and countless other parts predominantly from China.

Under current tariff structures, Apple would likely face duties on these imported components (though semiconductors are currently exempt), further inflating costs unless specific waivers could be secured.

Mohan calculated that if the recent 90-day tariff pause expires, the combined impact of tariffs and higher labor costs could increase an iPhone 16 Pro Max’s price by a staggering 91%.

“While it may be possible to move final assembly to the US, moving the entire iPhone supply chain would be a much bigger undertaking and would likely take many years, if even possible,” Mohan concluded.

Faced with these realities, Tim Cook has adopted a different approach than Steve Jobs’ outright dismissal.

Cook has actively engaged with the Trump administration, attending events and highlighting Apple’s significant domestic investments (a cited $500 billion commitment, including AI server production in Houston), which Trump often references approvingly.

This strategy proved effective during Trump’s first term, securing temporary tariff exemptions for key Apple products like the iPhone.

A notable moment came in 2019 when Apple committed to assembling its high-end ($3,000) Mac Pro computers at a Texas facility, culminating in a factory tour attended by both Cook and Trump.

Analysts suggest Apple might employ similar tactics now, potentially committing to small-scale US production of lower-volume items like HomePods or AirTags as a political gesture to gain broader exemptions.

Erik Woodring of Morgan Stanley told CNBC, “Given we now know that the Trump administration is willing to negotiate, we wouldn’t be surprised to see Apple commit to some small-volume production in the US… to try and win an exemption.”

Ultimately, while the call for a ‘Made in the USA’ iPhone resonates politically, the intricate tapestry of global supply chains, labor economics, and specialized skills presents monumental barriers.

Apple’s path forward likely involves continued political navigation rather than a fundamental, and costly, shift in its manufacturing geography.

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Apple and other major US electronics stocks climbed sharply on Monday after the government granted a temporary exemption from new tariffs on Chinese imports.

Apple was seen rising 5.86% in premarket trading. Other hardware makers also benefited, with Dell Technologies gaining 6.26%, Super Micro Computer up 5.2%, and HP Inc. advancing 4%.

The US Customs and Border Protection agency announced on Friday that smartphones, computers, and other electronics would be spared from fresh tariffs, with the exception of a specific 20% duty tied to the ongoing fentanyl crackdown.

“The removal of the worst-case scenario is an element of support, at least temporarily, for the sector,” said Alberto Gegra, an analyst at Equita.

He noted that the exemption prevents the possibility of a near-total blockade of supplies, which some had feared if China-related tariffs had exceeded 100%.

Apple seen as prime beneficiary as investors look past lingering risks

Despite the positive news, risks remain.

Both administration officials and President Donald Trump himself reiterated over the weekend that tech products could still face targeted tariffs as part of a broader investigation into semiconductors.

However, analysts and investors are betting that any such levies would likely be less severe than the blanket tariffs imposed on Chinese imports, some of which reached as high as 145%.

Among tech giants, Apple appears poised to gain the most from the reprieve.

The company, which assembles the vast majority of its products in China alongside increasing output in India and Vietnam, has faced intense scrutiny over its supply chain vulnerabilities.

Estimates suggest that between 80% and 90% of iPhones are still made in China.

Dan Ives, a longtime Apple analyst at Wedbush Securities, said the temporary relief gives Apple crucial time to recalibrate its operations.

“Apple has 1-2 months to plan its supply chain for a tariff component, with India likely the biggest focus area for expanded iPhone production,” Ives noted.

He also pointed out that the breathing room allows Apple to avoid immediately passing steep price increases onto US consumers.

According to Ives, the combination of the base tariff and the Section 232 tariffs would fall at a “somewhat manageable level” in the near term, giving Apple the ability to plan for any future adjustments.

“Apple can chart a clearer path, passing some costs to US consumers while absorbing part of the impact within its supply chain,” he added.

Earnings outlook hinges on China talks, but long-term story intact

Looking ahead, Ives forecasts that Apple’s earnings could decline around 10% in 2025 and 2026 in a base case scenario, due to demand softening and higher production costs.

In a worst-case outcome, where negotiations with China stall and tariffs persist for months, the earnings hit could deepen to between 15% and 20%.

However, there is room for optimism. If progress is made in trade talks and tensions ease by the summer, Ives believes the impact could be contained to a more modest 2% to 5%.

He maintained an Outperform rating on Apple stock, with a price target of $250, underlining his confidence in the company’s long-term prospects.

“We remain bullish on Apple’s long-term story,” Ives said, citing its 1.5 billion iPhone users, an installed base of 2.4 billion iOS devices, and its rapidly growing services division as key strengths.

“Investors need to look beyond the next three months and assume progress on the China front.”

Analysts adjust price targets for Apple

While Apple may find some near-term relief, uncertainty still lingers.

“While Apple is likely relieved near-term, uncertainty remains. In the end, our bet is still on Apple and Tim Cook — who may still need to increase its 4-yr $500 billion in US spending guarantees with the Trump administration to get out of paying tariffs altogether,” wrote Melius Research analyst Ben Reitzes in a research note on Monday.

Reitzes kept a Buy rating on Apple shares, with a price target of $226.

Citi Research analyst Atif Malik struck a similar tone, saying Apple stock was poised to rally after the tariff exemption, but warned that “Apple products are not immune from a weak macro environment.”

Malik maintained his Buy rating on the shares, with a price target of $245.

KeyBanc Capital Markets analyst Brandon Nispel called Friday’s announcement “probably the best-case scenario” for Apple, making it unlikely that his earlier downside target of $170 would be reached.

Nispel, who upgraded Apple shares to ‘sector weight’ from ‘underweight’ in a note on Monday, cautioned that Apple’s sluggish AI progress and softer consumer spending continue to pose challenges, leaving the tech giant “not fully out of the woods” from its year-to-date downturn.

He also flagged concerns around the US Department of Justice’s antitrust case against Google, which could threaten the estimated $20 billion Apple earns each year from search revenue through its Safari browser.

“That said, with the worst-case scenario of an escalating trade war likely off the table and smartphones spared from tariffs, it is difficult to argue for further downside in the stock,” he added.

JPMorgan analysts adjusted their outlook, reducing the stock’s price target from $270.00 to $245.00, while still maintaining an Overweight rating.

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US equity markets surged Monday, with technology stocks leading gains after President Donald Trump unexpectedly granted tariff exemptions on smartphones, computers, and key semiconductor components, offering a temporary reprieve for the sector rattled by trade tensions.

The Dow Jones Industrial Average climbed 500 points, or more than 1%, while the S&P 500 rose 1.8%. The tech-heavy Nasdaq Composite outperformed with a 2.4% advance.

The move followed late Friday guidance from US Customs and Border Protection confirming that several consumer tech products would be spared from the administration’s new “reciprocal” tariffs.

Apple shares jumped more than 5% in early trade on the news, while Nvidia added around 2%.

Apple has been one of the biggest casualties of the escalating trade war, with the tech giant shedding nearly $640 billion in market capitalization over just three trading sessions following the reciprocal tariff announcement.

Trump tariff uncertainty remains

However, the relief may prove short-lived.

Over the weekend, Trump and Commerce Secretary Howard Lutnick clarified that the exemptions were not permanent.

Speaking Sunday, Lutnick detailed plans for what he termed “a special focus-type of tariff” specifically targeting smartphones, computers, and other electronics, anticipated within “a month or two.”

In a Truth Social post, Trump noted that these items remain “subject to the existing 20% Fentanyl Tariffs” and were simply moved into a different tariff category, leaving open the possibility of future policy reversals.

The conflicting signals highlight the persistent uncertainty surrounding US trade policy, which has whipsawed markets over the past two weeks.

Last week marked one of Wall Street’s most volatile stretches in years.

The CBOE Volatility Index (VIX) spiked above 50 on Thursday as markets erased gains from a historic rally the day before, triggered by a 90-day suspension of many new tariff rates.

Despite Monday’s gains, major indices remain sharply lower since the announcement of Trump’s sweeping “liberation day” tariff plan earlier this month.

The S&P 500 has fallen 5.4%, the Nasdaq Composite is down about 5%, and the Dow has dropped 4.8% over that span.

Wall Street analysts remain cautious

The ongoing trade policy turbulence has prompted Wall Street strategists to slash year-end targets for the S&P 500.

Citi’s Scott Chronert became the latest to cut forecasts, lowering his year-end index target to 5,800 from 6,500, citing weaker earnings prospects and valuation pressure amid policy unpredictability.

Citi now expects S&P 500 earnings of $255 per share, down from a prior estimate of $270.

Goldman Sachs’ David Kostin also reduced his target, now at 5,700, having trimmed it twice over the past month, reflecting deteriorating earnings expectations and increased recession risk.

RBC Capital Markets’ Lori Calvasina cut her outlook earlier this month to 5,550.

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