Gold has rebounded 13% over the past month, trading at $4,628 per ounce on August 26, reaching its most overbought level since January’s all-time high. With the precious metal on track for its largest monthly green candle since September 1999, analysts have updated their gold price predictions.
Major financial institutions and banks recently issued updated forecasts, largely maintaining a positive outlook driven by central-bank purchases, interest-rate trends, and persistent global economic risks. However, institutions have also acknowledged that the rally is running faster than expected and that volatility is likely to remain elevated.
Analyst and Bank Forecasts
Bernard Dahdah, a precious metals analyst at Natixis, raised his year-end gold price forecast to $5,000 an ounce, up from his previous target of $4,600. Dahdah stated on August 25 that the latest rally began in early August as weaker economic data prompted markets to reassess interest-rate expectations. According to Dahdah, while markets have priced in at least two rate hikes, expectations have shifted with traders pricing in just one rate cut in December.
Dahdah also pointed to the U.S. Treasury’s plans to double its purchases of 10- and 30-year bonds to $4 billion as U.S. government debt surpassed $40 trillion. He noted that concerns over the impact of elevated long-term yields on mortgage and real estate markets have increased demand for gold as a hedge against market instability.
Other institutions have adjusted their targets as well:
- Citigroup: Raised its zero-to-three-month gold price target to $4,800 an ounce on August 24, with a 12-month target of $5,000.
- Morgan Stanley: Stated on August 20 that gold reached its fourth-quarter target of $4,450 per ounce faster than expected, and expects prices to rise above $5,000 an ounce in 2027 while warning of continued volatility.
Decoupling From Long-Term Real Yields
Morgan Stanley noted that gold has begun to decouple from long-term real yields. The metal rose in early August even as long-dated yields remained broadly flat. According to the bank, gold appears to be pricing in the fiscal concerns behind higher yields more than the yield level itself.
