Gold’s meteoric rise shows no signs of slowing, as growing investor enthusiasm often described as “FOMO,” or fear of missing out – continues to fuel the precious metal’s rally.
Analysts now believe that gold could soon breach the historic $4,000 per ounce mark, potentially within the next year.
According to Aakash Doshi, head of gold strategy at State Street Investment Management, the momentum in the bullion market is being driven by a combination of macroeconomic uncertainty, a weakening U.S. dollar, and expectations of continued interest rate cuts by the Federal Reserve.
“US $4,000/oz+ is likely a question of ‘when’ not ‘if’ in the current FOMO environment,” Doshi wrote in a recent note to clients.
“We think there is a 75% probability that bullion markets breach US$4,000+ in Q4 or by early 2026.”
Record-Breaking Rally Continues
Gold recently recorded its seventh consecutive week of gains, hitting an all-time high of $3,880.8 an ounce, marking a 47% rise since the beginning of the year.
Investors seeking safety amid political and economic volatility have been flocking to gold as traditional assets face mounting uncertainty.
Market participants are particularly wary of a potential U.S. government shutdown and further rate cuts by the Federal Reserve, both of which could weaken the dollar and bolster demand for gold.
The CME FedWatch Tool currently projects two additional rate cuts one in October and another in December as inflation pressures ease and policymakers aim to support slowing growth.
“As the Fed resumes its rate-cutting cycle, gold could be supported through two key channels,” Doshi explained.
“First, the reduced opportunity cost of holding gold as a non-yielding asset, and second, a potential bull steepening in the U.S. Treasury curve, which generally weighs on the dollar.”
The U.S. dollar has already fallen against most major currencies and is on track for its worst annual decline since the 1970s, further strengthening the case for gold as a hedge.
Also See: Gold Price Rides Seventh Weekly Advance Amid U.S. Shutdown, Technical Overheating
ETF Inflows Strengthen the Gold Market
The surge in gold prices is also being reinforced by record inflows into gold-backed exchange-traded funds (ETFs).
Doshi noted that global gold ETF inflows in 2025 are the strongest since 2020, a year that saw massive demand due to pandemic-driven uncertainty.
“Total physical holdings remain below their pandemic peak, suggesting scope for further buying,” Doshi added.
“Bullion ETF inflows can materially tighten gold’s supply-demand balance and are a key factor driving record prices this year.”
State Street’s SPDR Gold Trust (GLD), the world’s largest physically backed gold ETF has seen steady weekly inflows since mid-September, according to ETF.com.
Other top-performing funds include ProShares Ultra Gold and DB Gold Double Long Exchange Traded Notes, both of which have surged more than 90% year-to-date.
Meanwhile, Sprott Physical Gold Trust and the Franklin Responsibly Sourced Gold ETF have gained about 47%, according to data from VettaFi.
A Perfect Storm for Gold’s Ascent
The combination of falling interest rates, a weakening dollar, and investor anxiety over economic and political developments has created a perfect storm for gold’s unprecedented rally.
With supply remaining tight and demand continuing to grow, analysts suggest the metal’s path toward $4,000 is becoming increasingly plausible.
If current trends persist, gold could solidify its position not just as a safe haven but also as one of 2025’s most profitable assets.
As investors seek protection from volatility in stocks, currencies, and bonds, gold’s allure appears stronger than ever and the FOMO driving this rally may only just be beginning.
Source: MSN
