The gold market has been on an interesting journey after passing another historic milestone. If you slept in, you missed it—but at 6:15 a.m. EST on Friday morning, gold prices hit a new record high of $3,005.04 an ounce.
While many analysts, investors, and traders have been eagerly anticipating this unprecedented feat, it’s important to point out just how much momentum this market has as it hits a target many were not expecting to reach until the second half of this year.
In October, Kitco News attended the London Bullion Market Association’s annual precious metals conference, where delegates predicted that gold prices would push to $2,941 an ounce by October 2025. Very few people openly discussed gold reaching $3,000 an ounce, even as it became clear that the precious metal was on a long-term bull run.
Less than a month after the conference, gold prices hit a brick wall as former President Donald Trump’s election victory sparked renewed momentum in the U.S. dollar as he promoted his America-First policies.
However, gold didn’t consolidate for long, as the new year brought fresh momentum. The precious metal has climbed more than $300 within the first three months and is up more than 13% on the year.
Bullish sentiment has been building as key price levels have fallen one after another. Gold never looked back after pushing above initial resistance at $2,700, and $2,800 proved to be nothing more than a tiny speed bump in the rally. Many analysts saw the last four weeks of consolidation as the market merely catching its breath before this new breakout run.
What makes gold’s move to $3,000 per ounce particularly interesting is that it’s just another level in what analysts see as a much bigger rally. In the last few weeks, we’ve heard from several analysts who expect gold to reach its all-time inflation-adjusted highs set in January 1980.
On Thursday, commodity analysts at Macquarie raised their gold price forecast to $3,500 by the third quarter of this year. The analysts upgraded their forecast because $3,000 was originally their mid-year target.
And last week, Bart Melek, Head of Commodity Strategy at TD Securities, said he views any dip in price as a buying opportunity, expecting gold to establish a new trading range above $3,000 an ounce this year.
One big reason analysts remain bullish on gold, even at these elevated levels, is that it’s more than just technical momentum driving the price action. There is no major FOMO (fear of missing out) in the gold market yet—investors are only just starting to enter the market.
North American gold-backed exchange-traded funds saw their biggest monthly inflows since July 2020. However, ETF gold holdings are still about 20% below their 2020 peak — when gold prices were $1,000 lower.
In an interview with Kitco News, George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, said that due to growing economic uncertainty and geopolitical chaos, investors are turning to gold as a safe haven and inflation hedge.
Some analysts have noted that the full rotation into gold hasn’t even started, as equity markets continue to flirt with correction territory.
That is it for this week.
Have a great weekend
