Gold’s burgeoning safe-haven allure may see it surge to a record high of $3,500 an ounce during the third quarter, according to Macquarie Group analysts.

Bullion could average $3,150 an ounce over that period, analysts led by Marcus Garvey said in a note. The precious metal — which was trading around $2,940 an ounce on Thursday — will get further support from concerns about a potentially growing US deficit, they said.

Bullion has risen by 12% this year, driven by uncertainties around geopolitics and US President Donald Trump’s tariff policies. A worsening US budget outlook is signaling inflation could increase, which would benefit gold as a hedge, according to Macquarie.

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“We view gold’s price strength to date, and our expectation for it to continue, as primarily being driven by investors’ and official institutions’ greater willingness to pay for its lack of credit or counterparty risk,” the analysts said.

There is “ample scope” for bullion-backed exchange-traded funds to increase holdings, they said. Gold will also find additional support from the physical market — jewelry, bars, coins and technology — which has held up despite elevated prices, they added.

Last month, Goldman Sachs Group Inc. raised its year-end gold target to $3,100 an ounce, while Citigroup Inc. said earlier in February that it expected prices to hit $3,000 an ounce within three months.