Gold Prices Exceed $4,000: Will the Rise Continue?

Geopolitical Risks are Polishing Gold

The ongoing conflicts in the Middle East, the Russia-Ukraine war, and political turmoil in countries like the United States, Japan, and France have steered investors towards gold, known as a safe haven. The Federal Reserve (Fed) is expected to make two interest rate cuts this year, which is increasing gold's allure. A low-interest environment makes this precious metal, which does not yield interest or dividends, more attractive to investors. In this context, gold hit an all-time high, surpassing $4,000 per ounce during the week.

Rising Gold Demand and Investor Trends

Central banks around the world are increasing their purchases of gold, drawing attention as part of their reserve diversification strategies. Investors are strengthening their portfolios by turning to gold-backed exchange-traded funds (ETFs). According to data from the World Gold Council, this year saw an inflow of $64 billion into gold ETFs. This figure represents a reversal of the $23 billion outflow witnessed over the last four years. Additionally, gold ETFs in India recorded their highest monthly inflow in September, raising total managed assets to $10 billion.

Experts' Future Predictions

Bank of America Chief Strategist Michael Hartnett predicts that gold could reach $6,000 next spring, referencing past bull markets. Goldman Sachs has increased its gold price forecast for December 2026 from $4,300 to $4,900. The CEO of Wheaton Precious Metals stated that gold could reach $5,000 within the next year. HSBC anticipates that the gold rally will continue until 2026 due to geopolitical risks and financial uncertainties; however, it warns that the Fed's rate-cutting cycle might lose momentum. This bank predicts that gold prices will fluctuate between $3,700 and $4,050 throughout 2025 and between $3,600 and $4,400 in 2026.

Long-Term Price Expectations

CIBC Capital Markets analyst Anita Soni forecasts that gold prices will reach around $4,500 during the 2026-2027 period, before declining to $4,250 in 2028 and $4,000 in 2029. Soni notes that customs tariffs in the U.S. and long-term inflation concerns support gold demand. Additionally, the Fed's interest rate cuts are emerging as a significant factor driving gold's rise. The first interest rate cut occurred in December 2024, with an additional cut of 50 basis points expected in the remainder of the year. Experts emphasize that gold will continue to remain strong in the long term amid a low-interest environment and increasing economic uncertainties.