Expectations for Gold to Reach $5,000 by 2026

SadaNews Economy - Gold continues to record all-time high prices amid rising expectations that the Federal Reserve (the US central bank) will cut interest rates, while renewed trade tensions between the United States and China have increased bets on safe-haven assets, including silver, which reached its highest level ever.

Gold prices in spot transactions rose by 0.44% to $4,128.3 per ounce after reaching $4,179.71 during today's transactions, marking an all-time high.

US gold futures for December delivery increased by 0.3% to $4,144.60 after recording $4,190.90 during today's transactions.

Gold, considered a safe haven, has surged 57% since the beginning of the year and surpassed the $4,100 mark for the first time on Monday, supported by geopolitical and economic concerns, expectations of interest rate cuts, significant purchases of the yellow metal by central banks, and inflows into exchange-traded funds.

Expectations
Analysts at Bank of America and Societe Generale expect gold to reach $5,000 by 2026, while Standard Chartered has raised its average forecast for 2026 to $4,488.

Silver prices in spot transactions fell by 2.06% to $51.28 per ounce after reaching $53.54, supported by the same factors boosting gold.

Kelvin Wong, senior market analyst at OANDA, stated: "The trade tensions are not the main driver of today’s rise, but the increasing bets that the Federal Reserve will continue its path of cutting interest rates and reducing long-term financing costs have reduced the opportunity cost, which are all factors supporting gold as well."

Investors are awaiting a speech from Jerome Powell, the Federal Reserve Chairman, at the annual meeting of the National Association for Business Economics today, Tuesday, for clearer indications on the monetary policy path.

According to the FedWatch service from the CME Group, traders are 99% expecting a 25 basis point rate cut in October and 94% expect a similar cut in December.

On the political front, US-Chinese relations have strained after Beijing announced on Thursday that it would expand restrictions on the export of rare earth materials (rare metals), prompting President Donald Trump to threaten a 100% tariff on Chinese imports and impose restrictions on the export of critical American software starting from November 1.

US Treasury Secretary Scott Pysent stated yesterday that Trump still intends to meet with his Chinese counterpart Xi Jinping in South Korea at the end of October.

Pysent indicated that the ongoing government shutdown, which has now entered its 13th day, is beginning to affect the country's economy.