A specialist exchange-traded fund (ETF) manager has predicted the official price of gold may exceed US$4000 per ounce in the near future due to a combination of factors, such as stagflation fears, lower United States interest rates and rising levels of gold ETF buying.
“With bond real yields easing and the US dollar softening, investors are turning to gold as both a hedge and a store of value as speculation of a US rate cut grows, with the market now pricing in a 90 per cent chance of a September rate cut with persistent geopolitical risks and strong safe-haven demand also supporting gold,” Global X senior product and investment strategist Marc Jocum noted.
“There is increasing speculation that gold could test the US$4000 level as early as next year, implying a further 15 per cent upside from current levels, particularly if the US Fed follows through with deeper rate cuts or if geopolitical tensions intensify on factors such as US central bank independence and whether Donald Trump’s global tariffs are illegal.”
Further, Jocum pointed out some market forecasts have suggested the price for the precious metal could jump to US$4350 by end of 2026.
According to Jocum, the value of gold is benefiting from investor sentiment whereby the metal is being treated as more than just a defensive portfolio mechanism.
“Importantly, gold is not just benefitting from safe-haven demand, but also from broad-based investment inflows as investors reallocate towards real assets and they are increasingly using exchange-traded funds to gain exposure to gold,” he explained.
“Global X believes gold still has room to run on dovish Fed expectations, lower real yields and rising geopolitical risks. We still believe we are in a secular bull market for gold.”
The manager launched Global X Physical Gold Structured (ASX:GOLD) in 2003, which was the first gold exchange-traded product in the world. It recently launched an ETF offering investors an avenue to the stock of the top 300 companies listed on the Australian Securities Exchange.