Why Gold Prices Are Forecast to Surge Further

 Gold has been breaking records in 2025—and according to major banks and analysts, the rally may have more room to run. Here are the main drivers and what to watch.

Forecasts: How High Could It Go?

  • Bank of America (BofA) projects that average gold prices could reach US$4,000 per ounce by Q2 2026.

  • Deutsche Bank has also raised its 2026 forecast to ~$4,000/oz, citing strong central bank demand, possible U.S. dollar weakness, and expectations of the Fed easing rates. 

  • Other major institutions like Goldman Sachs are similarly bullish, suggesting that if investor demand ramps up (including from private investors), gold could possibly climb above $4,000 and maybe even higher.

Key Drivers Behind the Rally

  1. Inflation & Macroeconomic Uncertainty
    Gold continues to be a safe haven in times of inflation, geopolitical risk, and economic instability. When real interest rates are low or negative, the opportunity cost of holding gold decreases, making it more attractive. 

  2. Central Bank Demand, Especially from China
    Countries’ central banks are buying more gold to diversify reserves and reduce reliance on the U.S. dollar. This official demand provides a strong and stable support for prices. 

  3. Monetary Policy & Fed Rate Cuts Expectations
    A weaker U.S. dollar, along with expectations that the Federal Reserve will cut interest rates or at least loosen policy, boosts gold’s appeal. 

  4. Valuations of Gold Stocks Still Below Historical Peaks

    • The sector’s metrics like EV/EBITDA are around 11× currently, which is below earlier highs (≈15.4× in 2020). 

    • Price-to-Net-Asset-Value (P/NAV) ratio is about 1.88×, lower than peaks of 2.27× in 2020 and around 2.19× in 2011. 

    • These suggest gold equities haven't been priced for a full-blown bull run yet—there is potentially more upside.

  5. Industry Size vs. Trend Cycles

    • Global market cap of the gold sector has exceeded US$550 billion, almost doubling the peaks seen in earlier cycles like 2011 and 2020. 

    • But as a percentage of global equities, gold is only about 0.39%—well below its high in 2011 (~0.71%)—which suggests there’s still space for growth in investor allocation. 

Risks & Things to Watch

  • Sentiment is quite “crowded” in gold markets. If there is a shift—say, unexpected hawkish signals from the Fed, or stronger-than-expected U.S. economic data—that could trigger short-term corrections. 

  • Supply-side constraints (e.g., mine output, geopolitical disruptions) could push up costs, but also might limit how much production can increase.

  • The strength of the U.S. dollar remains a counterweight: if the dollar rallies, gold could face headwinds.

Conclusion: Is the “New Peak” Already In?

Not necessarily. While gold has already smashed through past records in 2025—moving past ~US$3,500/oz and even US$3,600/oz after weak U.S. employment figures—many of the valuation, demand, and allocation metrics suggest that what we’ve seen so far may be midway, not the end. 

If BofA, Deutsche Bank, Goldman Sachs (and others) are right, $4,000/oz may be just the starting point for the next leg up.


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