Financial encyclopedia

Recently, the price of gold has reached a new historical high, rising to $3,673 per ounce, with an increase of nearly 40% within the year. The market's focus is on one question: How much more can gold rise?

ANZ has recently raised its forecast to $3,800 per ounce by the end of the year and estimates that it may challenge $4,000 by mid-2026. But to reach this level, all the underlying conditions must be in place.

The force driving up gold prices

Expectation of interest rate cut

The US employment data was revised downward, and the market is betting on the Federal Reserve cutting interest rates. The decline in interest rates has made gold relatively more attractive.

The US dollar weakened.

The weakness of the US dollar has reduced the cost for overseas buyers to purchase gold, thus increasing demand.

Central bank buying

Central banks of China, Turkey, India and other countries have been continuously increasing their gold holdings. This is not only an investment but also a strategic consideration. By increasing gold reserves, central banks can diversify their reliance on dollar assets and reduce the risk of financial sanctions or external shocks.

Risk-averse sentiment

Due to the tense geopolitical situation and the increase in policy uncertainty, funds are flowing into gold as a safe-haven asset.

What conditions are needed to reach 3,800 to 4,000?

Real interest rates remain low: inflation cannot rise again.

The US dollar remains weak: The US economy cannot suddenly strengthen.

Central bank and investor buying continue: Demand for ETFs and physical gold persists.

Unexpected events drive risk aversion: such as geopolitical conflicts or fluctuations in financial markets.

Views of other institutions

ANZ: 3,800 by the end of the year, Mid-US 4,000.

Some Wall Street analysts predict that if the independence of the Federal Reserve is questioned, the gold price might even challenge 5,000.

Conservative analysis: If inflation rebounds, the Federal Reserve turns hawkish, and bond yields rise, the upward trend of gold may be hindered.

It is not a fantasy for gold to break through 3,800, but it requires multiple conditions to be met simultaneously.

The combination of a weak US dollar, low interest rates, central bank buying, and unexpected events has made gold a strong contender for 4,000.