Gold's historic rally to new all-time highs continued Wednesday as spot prices surpassed $4,000 for the first time, a day after gold futures broke through that point, driven at least partly by political volatility.
Gold is up 50% so far this year, with the boom gaining steam during the current U.S. government shutdown that has left the market without key economic data, and as France’s prime minister resigned less than a month into the job, Bloomberg noted.
The price has roughly doubled in two years.
Market analysts and participants are digging into the forces behind the historic rally and what it portends, not only for investors but more broadly for global financial structures.
Goldman Sachs raised its December 2026 gold price forecast Monday night to $4,900 an ounce from $4,300, citing ETF inflows and likely central bank buying.
“We see the risks to our upgraded gold price forecast as still skewed to the upside on net, because private sector diversification into the relatively small gold market may boost ETF holdings above our rates-implied estimate,” Goldman researchers said in a note.
Here are insights from other researchers and market observers:
Mohamed El-Erian, Allianz chief economic advisor and Wharton School professor, sees more than investor anxiety in gold’s record high.
Posting on X on Tuesday, he said the development was less about financial market unease “and, in part, more about an attempt by some to respond to what they perceive as the ongoing fragmentation of the global economic and financial order.”
The surge is occurring, he noted, alongside “risk-on” indicators such as the S&P 500, Nasdaq, Russell and other indexes also trading at or near record highs.
"No stopping the price of gold for now," he posted early Wednesday. "Consistent buying by some foreign central (banks) is being reinforced by growing institutional and retail allocations, and a more volatile speculative overlay."
Lisa Abramowicz, Bloomberg Surveillance co-host, posted on X on Monday, “Gold's parabolic move toward $4,000 is sending a warning signal to the traditional financial system: developed-market nations are losing clout as being good stewards of capital.
“This comes on a day when the U.S. government has been shutdown due to dysfunction, France's prime minister resigned after three weeks, and Japan's new prime minister plans stimulus at a time of elevated inflation. Japan is leading 30yr yields higher globally,” she wrote.
Aakash Doshi, global gold strategy head at State Street Investment Management, attributes the rally to a mix of geopolitical instability and sustained physical demand, and expects those forces to remain high well into next year.
In a recent research note, he and his team wrote that $3,500 an ounce appears to be a new support area. “While a 7-8% sell-off seems plausible in 4Q, especially given weak gold ETF historical seasonals in November/December, we think such a dip would ultimately be bought.”
Doshi cited key factors his team is monitoring, including the U.S. dollar downtrend, which benefits gold prices; the strongest global gold ETF inflows since 2020; stagflation risk, which historically supports gold outperformance; central banks’ gold accumulation; and economic and foreign policy volatility and risk-off hedging, which also should favor gold.
Yardeni Research President Ed Yardeni, in a post Monday, wrote that gold should reach $5,000 in 2026 and noted he had targeted $4,000 for this year. “If it continues on its current path, it could reach $10,000 by the end of the decade.”
He added, “The price of silver has also soared and should continue to rise along with the price of gold, though both may be due for a pullback or at least a short period of consolidation.”
Yardeni cited a note he posted over a month ago in which he wrote that President Donald Trump's “attempts to reorder the world's geopolitical order, including America's relationships with its major trading partners, might be unsettling and bullish for gold.” Trump’s effort to order the Fed to lower interest rates also could be bullish for gold, he wrote.
Moreover, China’s bursting housing bubble “has had a significant adverse wealth effect on Chinese savers, who've flocked to gold as an alternative safe asset. Furthermore, the rising standard of living in India has increased wealth, thereby boosting demand for gold, which is widely regarded as a valuable asset,” Yardeni wrote.
Frank Holmes, U.S. Global Investors CEO, who in 2020 predicted gold would reach $4,000, now expects it to hit $7,000 by the end of Trump’s second term.
On a recent podcast, he cited several factors, including global debt, AI and global political transformation, including rising military spending.
And in a note Monday, he wrote, “Are artificial intelligence (AI) and Magnificent 7 stocks in a bubble? I’ve been seeing more and more headlines lately speculating that a crash could be imminent, and while I don’t hold the same opinion, I do believe that prudent risk management demands that investors consider allocating to risk-off assets, including gold and silver.
“Like AI stocks, precious metals look overbought; but unlike AI stocks, they’re structurally underinvested. As such, I believe they deserve another look.”
Gold and silver remain under-owned, even after gold’s 17% surge to $3,840 in the third quarter and silver’s nearly 30% gain, he wrote.
“Remarkably, precious metals remain deeply underrepresented in portfolios. In a report dated September 25, Bank of America strategists point out that gold makes up a measly 0.4% of private client assets and 2.4% of institutional assets.
“When investors wake up to the need to diversify in a high-valuation, low-yield world, the flood of capital into metals and mining could be massive.”
Wealthy families have been buying up and taking physical custody of gold and silver, he said on the podcast.
Entrepreneur Arnaud Bertrand, who previously sold a business to TripAdvisor, posted on X on Tuesday, “I was studying other times in history when gold prices more than doubled in the reserve currency of the time, as they did in the past year: it's rare and almost always a sign of a profound loss of confidence in the existing monetary and political order, going all the way back to the Roman empire.”
He added that “it often marked the transition from one era of power to the next: the fall of Rome, Spain's decline from world power, the French Revolution and Terror, the end of Bretton Woods, etc. … It's often actually as much a cause as a sign of these episodes, as this is effectively a transfer of real wealth from the poor to the rich elites who protect themselves with gold - this being what ignites the political upheaval.”
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