(Kitco News) - Near-term momentum in the gold market is shifting, and prices could consolidate through the final two months of 2025; however, one analyst said he expects the next $1,000 move to be higher.
In an interview with Kitco News, Aakash Doshi, Head of Gold Strategy at State Street Investment Management, said he expects gold prices to consolidate below resistance around $4,000 an ounce, noting that November and December are traditionally negative months for gold-backed exchange-traded funds.
“Your price target for gold really depends on your time frame,” he said. “If we are talking about 12 months from now, this rally is not over, but I think we could see about eight weeks of consolidation. This is a healthy consolidation in a long-term bull market.”
The comments come as SPDR Gold Shares, the world’s largest gold-backed ETF (NYSE: GLD), has seen its holdings drop by nearly 8 tonnes after gold prices peaked around $4,360 an ounce.
Despite the recent global ETF outflows, thegold market has seen unprecedented investor demand; however, Doshi noted that global ETF holdings are still well below their peak from 2020. He added that he expects it’s only a matter of time before new records are set.
“Because November and December are not great months, we might not get there this year, but I would expect to see new highs in the first quarter of 2026.”
While State Street doesn’t have an official 2026 gold price forecast yet, Doshi said that $5,000 would be a reasonable target.
“If I had to make a call on $3,000 or $5,000 gold – with prices trading in the middle near $4,000 – I would be leaning more towards $5,000,” he said.
Although ETF outflows could exacerbate seasonal trends as momentum resets from August and September’s rally, which was driven by Fear of Missing Out (FOMO) sentiment, Doshi said he expects any correction to be relatively shallow, as there is still significant fundamental support in the marketplace.
Doshi noted that the latest data from the World Gold Council showed record physical demand for gold, even as prices traded at record highs. He explained that investors appear comfortable with higher prices, as there is still plenty of value in the marketplace.
“In this rally, gold has been overbought but not overowned, so we still see lots of potential,” he said.
One major factor that has transformed the gold market remains central bank demand. Official reserves are on track to increase by between 750 and 900 tonnes this year. While demand has fallen from around 1,000 tonnes bought in each of the last three years, it is still double the amount purchased in 2021, when the trend first started.
“This dedollarization trend has transformed the gold market. Gold has become an important alternative global fiat currency trade,” said Doshi.
At the same time, Doshi said that investment demand also remains strong as the Federal Reserve is expected to continue cutting interest rates while inflation pressures remain elevated.
Falling interest rates and rising inflation are expected to push real interest rates lower, reducing gold’s opportunity cost as a non-yielding asset.
“The bull-steeping we are seeing with the backend rising is anchoring higher inflation expectations,” he said. “This environment will continue to support gold.”
