Gold can reach $4,000 an ounce by the end of next year if the dollar declines, central banks continue to increase their holdings, and the Federal Reserve reduces interest rates to support the US economy.
In an interview with Bloomberg, Ian Samson, the manager of a multi-asset fund at Fidelity International, stated that the company remains optimistic about the precious metal, with certain cross-asset portfolios recently increasing holdings after prices dropped from an all-time high of above $3,500 an ounce in April.
The most interesting part of the interview was his perspective on the current bull market in gold.
“Sure, gold has come a long way, but if you look at when gold’s been in a bull market — like 2001 to 2011 — it annualized 20% per annum,” he said. “From 2021 to today, it’s also annualizing 20% a year. So it’s not necessarily, in the context of a bull run, massively overstretched,” said Samson to Bloomberg.
Bullish or Bearish on Gold
Fidelity’s positive stance on gold is similar to that of Goldman Sachs Group Inc., which has argued in recent quarters for an eventual climb to $4,500 per ounce in a high-risk scenario. On January 1, 2025, gold was at $2,623, which gives a staggering return of 71.5% to close 2025.
Goldman Sachs and other gold market participants are bullish on gold due to the growing US economy and trade war, as it becomes an attractive recession hedge solution.
Others, including Citigroup Inc., are more cautious, forecasting lower prices. Citibank predicts the gold price to fall below $3,000 per ounce in the coming quarters after a record-breaking rally. A resolution of diplomatic tensions or clarity on trade policy might decrease some of the market’s present safe-haven appetite.
“We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see President Trump’s popularity and US growth ‘put’ kicking in, especially as the US mid-terms come into focus,” they said, referring to US elections due in the middle of Trump’s term. Further, “we see a lot of scope for the Fed to cut from restrictive policy to neutral,” stated the Citi report.
Gold Outlook
Gold could hit $4,000 in 2025 amid Fed rate cuts, weak dollar, and geopolitical risks, but Citi warns of pullback below $3,000 as Trump tariffs and election tailwinds boost confidence.
Initially, Gold demand surged due to the rapidly changing geopolitical landscape and war-like situations involving Russia, Ukraine, Israel, and Iran. Then came Trump’s tariffs, which have the potential to disrupt global trade by causing conflicts among countries.
Currently, the US economy is stable with job numbers indicating resilience, but high interest payments on its multi-trillion-dollar debt are a red flag.
The US Fed is expected to begin cutting rates if tariffs don’t significantly impact American goods prices, with 300bps of rate cuts expected starting in September.
With rates decreasing, gold may shine brighter if geopolitical and global economic threats persist. This might be a catalyst for gold.
Gold and interest rates are negatively associated, and when economic dangers arise, investors prefer to store their money in gold rather than other dollar-denominated assets.
A weaker dollar and deteriorating economy or worsening fiscal position could potentially trigger gold prices further.
Gold’s support level is primarily influenced by US economic data, dollar index movement, Fed rate cuts, and the Trump tariff situation.
Gold has increased by more than 35% over the past year, and 25% YTD. Gold price today is $3,300 and the gold price in India for 24 carat 10 gram is Rs 98,600. Gold’s all-time high price of $3,500 was recorded on April 22.
Whether the bull run in gold will continue in the last five months of 2025 remains to be seen.