Gold Prices Continue to Break Records. How Much Higher Can They Climb?

In late March, Goldman Sachs predicted the price of gold would hit $3,300 per troy ounce at the end of the year.

It took less than a month to reach that level. Since then, gold has continued climbing previously unscalable heights—and forecasters have had trouble keeping pace.

The precious metal’s price now reaches new all-time highs almost daily. Early last week, Goldman raised its end-of-year forecast to $4,900 per ounce from $4,300 previously. The increase occurred just in time: Gold eclipsed $4,300 Thursday for the first time, pushing its year-to-date gain to roughly 65%.

Gold’s biggest rally in a half-century begs the obvious question: Just how high can its price go?

‘Unrelenting’ Momentum

In addition to Goldman’s new forecast, HSBC sees gold hitting $5,000 per ounce in 2026. Bank of America, noting that a record $34 billion has flowed into gold in just the past 10 weeks, is even more bullish, projecting gold will peak at $6,000 per ounce by spring.

“Momentum in gold has been unrelenting,” LPL said in a research note, citing a 3-to-1 ratio of upside to downside days for the metal since the end of August. “The latest leg higher has been underpinned by the growing uncertainty over the U.S. government shutdown and fear-of-missing out flows into physical gold ETFs.”

One of the factors playing into gold’s surge is the so-called debasement trade. Global investors concerned about high levels of government debt increasingly have opted for gold and other hard assets in favor of government bonds and investments in the U.S. dollar.

UBS says some investors have turned to gold in a global environment marked by trade tension, economic uncertainty and some concern that stocks might be overvalued. In addition to its role as a classic hedge against risk, UBS said gold’s “low correlation with equities and bonds, especially during periods of market stress, also makes it a valuable diversifier.”

Finally, expectations the Federal Reserve will continue cutting interest rates, even as inflation remains higher than its 2% target, should “further undermine the appeal of the U.S. dollar and therefore boost investment flows into bullion,” UBS said.

Could Investors Cash In?

Amid the weakness in the dollar, more global central banks have turned to gold to store their reserves this year. Central bank purchases increased after Russia invaded Ukraine in 2022; Goldman says ETF purchases and central bank demand “are sticky in our pricing framework.”

Retail interest in physical gold has boosted demand, too. Owning gold bars and gold jewelry has a long cultural history, particularly in India and other parts of Asia. Many buyers in that region have rushed to secure purchases as prices escalate.

UBS forecasts overall global gold demand this year at 4,850 metric tons, which would mark the highest level since 2011. It reported that purchases from the Perth, Australia, Mint, a prime source for Asian buyers, increased 21% in September from August.

Of course, any strong asset rally carries with it at least some concern. The World Gold Council, despite its stance that “gold’s strategic foundation remains robust,” nonetheless said short-term scenarios exist that could cause some gold investors to cash in on the profits they’ve made this year.

For example, a resolution of the U.S. government shutdown and other geopolitical tensions could cause gold investors to look elsewhere. This year’s rapid increase in prices also could dampen retail demand, and portfolio allocations to gold may have neared a point that requires rebalancing to other assets.