From Barclays to Goldman... consensus on gold rising to $4,000

 

gold

From Barclays to Goldman... consensus on gold rising to $4,000

Global inflationary pressures, coupled with the threat of an economic slowdown and rising geopolitical tensions, have pushed precious metal prices to unprecedented highs. They have jumped more than 40 percent since the beginning of the year, with recent estimates from Barclays Bank predicting a continued upward trend.

Unlike traditional assets such as stocks and bonds, alternative investments, led by gold, are more sensitive to major variables, such as global growth, monetary policy, and geopolitical fluctuations.

Barclays notes that while the weak economic environment has helped boost demand for precious metals this year, gold's gains are not solely linked to uncertainty. According to the World Gold Council, the gold yield attribution model shows that the decline in opportunity costs has had a roughly equal effect in driving prices higher, and the two factors together explain most of the gains that continued through August.

Gold to Oil Ratio Index

It's no surprise that gold prices are moving above their historical highs. This is evident in the gold- to-oil ratio, which measures the number of barrels of oil needed to purchase one ounce of gold. The ratio rose from 36 barrels at the beginning of the year to 60 barrels last September, a level only exceeded during the height of the COVID-19 pandemic.

According to the British bank, these high levels raise fears of a sharp sell-off at any time, but it is difficult to predict when this will occur. Accelerating global inflation or the outbreak of new geopolitical crises could lead to continued upward momentum for gold, precious metals, and perhaps other alternative assets.

Barclays Bank notes in its research that major and unexpected events have the most profound and lasting impact on precious metals prices, while the impact of anticipated or local developments is limited.

According to the report, 2025 will be remembered as the year the US dollar's rhythm stopped , tighter tariffs disrupted global trade flows, and a new rhythm took hold of global markets. Ongoing global trade tensions and the Federal Reserve's pivotal policy shift, from a hawkish stance to a more dovish stance amid slowing growth, led to a series of consequences for global asset classes.

Gold price rise

Barclays' forecast for gold's rise was adopted a few days ago by Goldman Sachs, which predicted a six percent rise in gold prices by mid-2026, supported by renewed demand from key buyer groups that have contributed to a series of record highs for the yellow metal.

Goldman Sachs Research sees a greater risk that gold prices will exceed its forecasts than decline. However, the increase in long positions in gold, which are bets on higher prices, "increases the risk of tactical pullbacks," as speculators' net bets on gold tend to revert to their mean over time.

On Friday, HSBC said that gold could reach more than $4,000 per ounce in the near term, driven by geopolitical risks, financial uncertainties, and threats to the independence of the Federal Reserve.

"The gains could continue into 2026, supported by official sector buying, and institutional demand for gold as a diversification asset could remain strong," the bank said.

US interest rate cut

Gold prices were little changed the day before yesterday, recording their seventh consecutive weekly gain, supported by growing expectations of further US interest rate cuts this year, along with concerns about the potential impact of a US government shutdown.

Spot gold rose 0.03 percent to $3,857.25 an ounce, after hitting a new all-time high of $3,896.49 last Thursday. The precious metal has gained 2.6 percent so far this week, while US gold futures for December delivery rose 0.32 percent to $3,880.50 an ounce.

UBS analyst Giovanni Staunovo commented that recent economic data indicates that the US Federal Reserve will be forced to continue cutting interest rates in the coming period.

$4,000 per ounce

"With further interest rate cuts expected, this will further support gold prices in the coming months, with the possibility of the yellow metal breaching $4,000 per ounce by the end of this year," Staunovo added in a research note.

Although gold's unprecedented rise reflects global concern over inflation and geopolitical risks, future forecasts remain divided between those who see the yellow metal on its way to breaching the $4,000 per ounce threshold and those who warn of a potentially severe correction.

In the meantime, gold remains—as it always has been—the safe haven investors turn to during times of turmoil. But this time, the price of safety may be costly, whether for those who buy at the peak or those who risk selling before the race is over.