The gold market remains firmly supported above $3,300, and analysts suggest it’s only a matter of time before prices break out of consolidation and retest record highs.
With U.S. labor market momentum fading and inflationary pressures continuing, experts are revising their gold price forecasts. The outlook now anticipates gold averaging $3,400 per ounce in Q3 2025 and $3,450 in Q4, up from an earlier estimate of $3,200 for both periods.
The revised forecast indicates that gold prices could surpass $3,500 per ounce in Q1 2026, representing a 9% increase from previous estimates. The upward revision is linked to projections for aggressive Federal Reserve rate cuts in the second half of 2025.
📊 Gold Price Outlook: Fed Rate Cuts to Propel Bullish Momentum
With U.S. rate cut expectations intensifying, gold could be poised for a fresh record high. Analysts anticipate three rate cuts in the second half of 2025 and another two in early 2026, which is more aggressive than what markets are currently pricing in.
Lower interest rates typically make gold more attractive, as it doesn’t yield interest compared to other assets. The CME FedWatch Tool currently sees a 90% chance of a rate cut next month, with markets forecasting a 50/50 chance of three cuts by year-end.
🌍 Global Factors Supporting Gold Prices
Concerns over the Fed’s independence are also expected to support gold demand, as the resignation of Governor Adriana Kugler could give President Trump the chance to appoint someone more aligned with his rate-cutting agenda. These factors are likely to drive safe-haven demand for gold.
- Central bank demand for gold remains robust, with central banks continuing to build reserves amid economic uncertainty and efforts to diversify away from the U.S. Dollar.
- Gold-backed ETFs saw their strongest investment demand since 2020 in the first half of the year, although holdings are still 300 tonnes below record highs set five years ago.
🧐 Why Gold Could Hit New Heights
Central banks are still buying gold, geopolitical risks remain elevated, and ETF holdings continue to rise — all underpinning gold prices at current levels. If the Fed continues cutting rates, this could be the catalyst needed to reignite the record-breaking rally in gold prices.
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