The prevailing macros have most analysts convinced that gold will eventually breach $4,000.We will tell you when it will likely get here.
Coming into 2025, our analysis indicated that gold had a high chance of hitting $3,000. We expected it to reach this historic price in May.
However, trade war escalations, a weakening US dollar, Trump-Powell tiff, and rate cut threats brought forward gold’s fortunes and helped it climb above $3k in mid-February.
At the time of writing, gold prices have shot to a new all-time high above $3,500 after a meteoric 33% in the first four months of the year.
We have been consistently bullish about gold prices and are of the informed opinion that the gold price will eventually breach the $4,000 mark.
Previously, our analysis showed that gold will likely reach this price level in 2027. However, if the prevailing macroeconomic conditions continue, the rally to $4,000 may come way sooner, most likely late 2026.
But What Will Drive Gold Prices Towards $4000?
A full-blown recession or banking crisis
Earlier in the month, the IMF and JP Morgan raised the odds of the US entering recession before year-end to 40%.
Goldman Sachs is even more pessimistic and opines there is a 45% chance the country enters recession. Should this happen, it would trigger a global recession and investor flight to safety, with gold being the ultimate haven.
Such a move would catalyze its already ongoing rally and lay the ground for a jump towards $4k.
Aggressive rate cuts by the Fed and dollar weakness
The Federal Reserve has already made it clear that it will likely cut rates twice in 2025.
However, we suspect there could be more cuts as the IMF has already projected a slowdown in economic growth.
If the Fed cuts rates due to slow economic growth, the US Dollar will lose even more value, which is a boost for gold prices.
Surging inflation and loss of dollar confidence
In the year to date, the US Dollar has been losing strength by as much as 10% against other foreign currencies.
Much of this may be attributed to the de-dollarization campaigns by the likes of BRICS nations. If this continues, with these countries turning to gold as their main currency reserve in place of the dollar and US Treasuries, it could trigger massive value gains for the yellow metal.
Gold’s Race to $4,000 is now a Reality
At the time of writing, gold is trading around $3,340, having pulled back from the ATH set in two days ago.
But it has shown any signs of slowing down. While we don’t expect it to reach $4,000 this year, both technical and fundamental indicators leave no doubt that it will eventually get there.
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