Gold’s Rally Enters Next Phase
Gold’s remarkable run in 2025 has turned heads around the world. The metal shattered record after record, climbing past $4,000 per ounce and gaining 54% so far this year. Prices have averaged $3,281. Putting gold on track for its strongest annual performance since the 1979 oil crisis.1
Despite a recent pullback below $4,000, analysts say gold’s long-term uptrend remains solid. Economic uncertainty, inflation risks, and de-dollarization continue to drive demand.
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A Historic Rally Fueled by Global Uncertainty
Gold’s surge this year has been supported by a powerful mix of factors. They include geopolitical concerns, ongoing trade turmoil, and waning confidence in dollar dominance. Central banks have continued to buy aggressively for reserve diversification. Massive inflows into exchange-traded funds have reinforced the rally.
Expectations of U.S. interest rate cuts have also boosted gold, which tends to shine when real yields fall. Analysts note that persistent uncertainty is likely to sustain support for the metal. Investors increasingly view gold as a core portfolio asset rather than a short-term speculative play.
Metals Focus released their annual Precious Metals Investment Focus report. It said, “ongoing uncertainty surrounding U.S. trade policy and its impact on the global economy is expected to remain a key driver of sentiment towards gold.” The group forecasts gold prices averaging around $4,560 per ounce in 2026, a 33% rise from this year’s average.3
A Brief Pullback Below $4,000
On October 27, gold slipped about 3%, dipping below the $4,000 mark to around $3,987 per ounce. The decline followed optimism about a potential U.S.-China trade deal and a stronger U.S. dollar. Both of which dampened near-term safe-haven demand.
Earlier that day, spot gold was down to about $4,082.77, with futures off about 1% near $4,095.80. The pullback extended a short-term correction after gold hit record highs near $4,380 earlier in the month.4
Ole Hansen is Head of Commodity Strategy at Saxo Bank. He said that while gold has held important technical support, the market may not be done correcting. He noted that the recent correction was ” flow- and not data-driven.” Hansen added that the sharp drop marked “the start of a consolidation phase that was both overdue and necessary.”5
Rate Cuts Still on the Horizon
Inflation remains above the Federal Reserve’s 2% target. But most analysts believe it won’t derail the current easing cycle. Markets fully expect the Fed to cut interest rates by 25 basis points next week. They are also pricing in another cut in December, according to the CME FedWatch Tool. When rates go down, gold often rises. That’s because lower yields make non-interest-bearing assets like gold more attractive to investors.
Some analysts suggest that gold’s ability to hold support above $4,000 shows the market has already priced in much of the Fed’s policy path.
Consolidation Before the Next Move Higher
After its parabolic rally, gold now appears to be entering a period of consolidation. It’s like the pause seen earlier this year when prices broke above $3,000. Analysts view this as a healthy development in a long-term bull market.
Michael Brown is Senior Market Analyst at Pepperstone. He said, “The bull market is far from dead; instead, it’s just taking a bit of a breather. What we’ve seen in recent trade looks to be the culmination of a parabolic rally that went too far, too fast, and ultimately ended up pulling back in aggressive fashion, as new longs bailed and those who’ve been in the trade for some time sought to book profits.”6
Neil Welsh, Head of Metals at Britannia Global Markets, described gold’s recent volatility as “a constructive correction rather than a reversal.” Welsh expects prices may range between $4,000 and $4,200 as new positions build. He sees structural forces continuing to point toward higher prices. “The move from $4,100 to $5,000 could take longer than the explosive leg that preceded it,” he said, “but this move could attract dip-buying interest looking to take advantage of short-term weakness.”7
Outlook: Gold’s Strength Looks Set to Continue
Most analysts expect gold to rebound and continue rising over the coming year. Exploding government debt continues to push demand for gold. Central banks are also buying more to diversify and protect reserves. Growing global tensions are adding to that demand. Major banks such as Bank of America see potential for gold to reach as high as $5,000 per ounce by 2026. B of A predicts an average price around $4,400.
A Reuters survey of 39 analysts predicts a median price of $3,400 for 2025 and $4,275 for 2026. That would mark the first time the annual average has exceeded $4,000.8
Despite short-term volatility, the consensus remains clear. Gold’s appeal as a hedge against uncertainty and inflation is stronger than ever. Central banks and institutional investors are expected to remain dominant buyers, supporting prices in the years ahead.
Conclusion
Gold’s current consolidation phase could be a pause before another significant advance. The same economic and geopolitical risks that have driven gold’s rise remain in play.
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