In recent years, gold has taken the task of justifying its elevated status among assets to heart and outperformed the vast majority of its typical competitors.
The impressive rally in the long and short-term charts has also led to an escalation in price forecasts. Specifically, it took the commodity well over a year to hit its $3,000 target, but its accelerating 2025 rally is now threatening to invalidate the prevailing $4,000 forecast.
Since late 2023, experts such as Bloomberg’s Senior Commodity Strategist Mike McGlone have been calling for a rally to $3,000 – a call that turned into a consensus prediction for the end of 2024. Gold, in turn, finally crossed the anticipated threshold in mid-March of the current year.
Since breaking above the level, the commodity has only accelerated its rise. Gold took approximately 22 months to cross the distance between $2,000 and $3,000, assuming it retains the pace seen in recent weeks, it could make the journey to $4,000 in less than three months.
In turn, if the yellow metal’s pace persists, the prevailing 2025 targets would be swiftly invalidated by being reached, thus opening the possibility that the commodity could climb to $5,000 before the year is out.
Once again, it is worth noting that the recent climb’s speed indicates that gold hitting the lofty target by October or November is plausible.
Why Gold is unlikely to reach $5,000 in 2025
Still, while there is a consensus that $4,000 is a viable target for 2025, and investment strategist Ed Yardeni came out with a $5,000 forecast for 2026, the higher figure appears somewhat dubious.
Economic uncertainty has been a key driver of the yellow metal’s rally, as nation-states have become anxious over the decision to freeze Russian assets, triggering a central bank buying spree, and individual traders have increasingly feared inflationary and tariff risks.
By press time on April 22, it appears exceedingly unlikely that the macro situation will remain bad enough to justify purchasing more gold at the already-exorbitant prices without triggering a crash that would make dragon-like hoarding impossible.
Similarly, even if the rally proves persistent, $5,000 remains ambitious as $3,500 has already proven a difficult level to maintain. Indeed, within hours of crossing above it, gold retraced approximately $40 to its press time price of $3,460.
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