Gold forecast that it will shatter the $4,400-per-ounce barrier soon— its highest level in history — driven by investors flocking to safe-haven assets amid rising economic and geopolitical uncertainty. The surge is also fuelled by expectations that the U.S. Federal Reserve will continue cutting interest rates.
Gold has long been viewed as a store of value in times of instability, and its performance this year reflects that reputation: prices in the spot market are up 55% since January, following a 27% increase in 2024.
A mix of factors — including central-bank purchases, renewed interest in gold-backed ETFs, a weaker U.S. dollar, and strong retail demand — has intensified the rally.
The ongoing U.S. government shutdown, now entering its seventh day, has also delayed the release of key economic data, forcing investors to rely on secondary sources to anticipate the timing and scale of upcoming rate cuts.
Markets currently expect a 25-basis-point cut at the Federal Reserve’s next meeting this month, followed by another 25-point cut in December.
Meanwhile, political turmoil in France and Japan has further boosted demand for gold as a global safe-haven asset.
1. Why Gold Is Rising
According to Waleed Fuqahaa, Investment Director at Al Ahli Financial Brokerage, gold has risen by nearly 50% since the start of the year.
He attributes this to several key reasons:
- Trump’s new tariffs on major industrial economies triggered uncertainty and trade tensions, pushing investors toward safe havens like gold.
- Geopolitical instability, particularly in the Middle East.
- Tensions between President Trump and the Federal Reserve over monetary policy, raising doubts about the central bank’s independence.
- Expectations of a U.S. economic slowdown and the risk of stagflation.
- The U.S. national debt surpassing $37 trillion, amplifying concerns about repayment capacity.
- Massive central-bank gold purchases exceeding 900 tons in the first nine months of the year, led by the People’s Bank of China and European central banks, alongside increased accumulation by gold-linked investment funds.
Economic and Political Drivers
Mostafa Fahmy, Chief Strategy Officer at Fortress Investment, told Al Jazeera Net that several overlapping economic and political dynamics have pushed gold to record levels.
Economic Factors
- Across advanced economies — particularly in the U.S. and Europe — investors have been selling fiat currencies such as the dollar and euro due to mounting debt and structural economic challenges. Gold has become the trusted alternative.
- Indicators suggest the U.S. economy has already entered stagflation.
- Overvalued stock markets, especially in the U.S., have made investors cautious, anticipating future corrections.
- Rising global bond yields, especially in Japan, are draining liquidity and threatening global financial stability.
Political Factors
- President Donald Trump’s deployment of troops inside U.S. states without exceptional necessity has raised internal security concerns.
- In France, the resignation of the government and attempts to form a new one could lead to early elections and a possible credit-rating downgrade.
- Britain also faces potential financial instability next month, with expectations of fiscal-policy shocks that could trigger political change and empower the far-right.
Geopolitical Factors
- Persistent tensions between Russia and NATO,
- The looming threat of military escalation between Israel and Iran,
- And the ongoing Israeli war on Gaza — all contribute to a climate of fear and uncertainty that sustains gold’s rise.
2. Gold’s Strong Performance Against Major Currencies
| Currency | Monthly Gain | Yearly Gain |
|---|---|---|
| U.S. Dollar | +10.7% | +53.5% |
| Euro | +12.2% | +45.2% |
| British Pound | +12.0% | +50.3% |
| Canadian Dollar | +12.0% | +57.1% |
| Australian Dollar | +11.2% | +57.9% |
| New Zealand Dollar | +14.6% | +64.2% |
| Indian Rupee | +11.7% | +62.3% |
| Brazilian Real | +9.4% | +48.5% |
3. What’s Next for Gold Prices?
Fuqahaa expects some profit-taking corrections, possibly testing the $3,750 level again. However, he notes that most central and major commercial banks forecast gold to reach $4,400 per ounce before the end of the year.
He cautions that current levels are risky for retail investors, who may not withstand sharp pullbacks, unlike central banks that can afford to buy even at high prices.
Fahmy, however, predicts that momentum will continue, with sustained demand from both retail buyers and central banks. He believes gold could surpass $5,000 per ounce in the coming period if the current global conditions persist.
Goldman Sachs also raised its forecast last Monday, projecting $4,900 by December 2026, up from a previous estimate of $4,300.
The bank had earlier said gold could reach $5,000 if the Federal Reserve’s independence weakens and investors shift even a small share of their Treasury holdings into bullion.
In the long run, LiteFinance expects gold to trade between $4,812 and $6,546 per ounce from 2027 to 2030.
Meanwhile, a report by Ronald-Peter Stoeferle and Mark J. Valek from Incrementum AG anticipates gold reaching $8,900 by 2030, based on inflation and monetary-policy projections.
4. Expert Advice for Investors
Waleed Fuqahaa offers practical guidance for small investors:
- Those who bought below $3,000 should hold their gold and wait, as the market remains in a strong uptrend.
- New investors should avoid chasing record highs and wait for a price dip, as they might not withstand possible corrections.
- Diversifying portfolios between gold and silver is advisable to mitigate profit-taking risks.
Mostafa Fahmy recommends holding gold positions given the fragile global economy, persistent inflation, and uncertain monetary-policy outlook.
He warns short-term traders:
“When the rallies are this strong, the corrections can be equally sharp — caution is essential.”
