Experts Predict Gold Reaching New Price Peaks

Hossam Abdelnabi (Abu Dhabi)

Gold prices have continued to reach new record highs over the past few days, bolstered by significant investment inflows driven by fears of "missing out" and evident institutional buying by central banks. This has reignited questions about the factors that have led to gold's more than 51% increase since the start of the year. What is the future for gold? Have investors missed the opportunity to buy, or are the factors such as political and economic tensions, which supported the increase, capable of driving gold prices up again?

Central Banks' Purchases

The World Gold Council's report, released yesterday, revealed a surge in central banks' purchases of gold in August, with an addition of a net 15 tons to global gold reserves. The report noted that during August, seven central banks reported increases (of one ton or more) in their gold reserves, while only two reported decreases. Despite recent record highs in gold prices this year potentially posing a barrier to central banks' purchasing levels, a recent slowdown in buying doesn't necessarily signal a loss of interest from central banks in gold overall. The report emphasized that central banks remain keen on increasing their gold exposure.

Price Peaks

According to the latest report from the World Gold Council, ongoing trade and geopolitical risks, a weak U.S. dollar, and expectations of interest rate cuts in the United States pushed gold to its highest historical level in 2025, marking 39 new price peaks throughout the year as investors flocked to gold as a safe haven. Despite its substantial increase, gold is likely to remain a good investment for hedging purposes, having risen by 46.6% from the start of the year through the end of September. It recorded its highest annual return since 1979, with the price of an ounce rising by 11.6% in September to $3,285.

The report titled "Monthly Review of the Gold Markets for September" highlighted that global gold Exchange Traded Funds (ETFs) recorded their largest monthly inflows in September, rounding off the third quarter with the strongest quarterly performance ever, driven by rising prices and increased investment demand. The total managed assets of global gold ETFs reached $472 billion by the end of the third quarter, a 23% increase quarter-over-quarter, setting a new record. Regional ETFs continued to record positive inflows for the fourth consecutive month, adding $10.6 billion in September alone.

Upward Trend

Oleh Hansen, Head of Commodity Strategy at "Saxo Bank," noted that gold has maintained its upward trajectory for a year, with the spot gold price surpassing $4,000 per ounce for the first time, despite the dollar's recovery and the Federal Reserve's hesitance to cut rates further. A potent combination of geopolitical tensions, economic uncertainty, and declining confidence in fiat currencies has created a perfect storm for investment metals, resulting in a 51% year-to-date gain in gold, reflecting a broad demand for tangible assets amid debt sustainability concerns.

Hansen added that with the ongoing absence of global political and economic stability, investors are likely to continue gravitating towards gold, silver, and platinum. Recent concerns over Federal Reserve independence and political pressure on monetary policies have enhanced gold's appeal as a safe haven. The ongoing U.S. government shutdown and related financial fragility further enhance this sentiment. Technically, gold faces exaggerated short-term buying pressure but remains underowned in major portfolios, with resistance levels around $4,100 to $4,150. Nonetheless, there are no fundamental barriers to further rises; corrections between $200–300 may offer the best entry points for new investors.

Strongest Gains

Meanwhile, Daniella Sabine Hathorn, Senior Analyst at "Capital.com," suggests that investor trends towards moving away from fiat currencies like the U.S. dollar, along with political and financial uncertainty in the United States, have contributed to increased demand for safe haven assets, resulting in significant gains for precious metals in recent weeks. Lower real yields, spurred by expectations of monetary policy easing from the U.S. Federal Reserve, have supported rising prices, with gold recording its strongest monthly gains in September since the coronavirus pandemic, rising around 12%. The positive momentum continued into October.

Upward Momentum

Vijay Valecha, Chief Investment Officer at "Century Financial," notes that gold's strength over recent days draws from a mix of safe haven demand, the continuing U.S. government shutdown, and escalating political tensions. The record highs achieved by gold come as global investments flood into safe haven assets, with COMEX exchange futures and spot prices both surpassing the $4,000 per ounce mark, indicating sustained, strong upward momentum.

Valecha mentioned that gold-backed ETFs extended their internal inflows for the sixth consecutive week, the longest streak since 2022, illustrating a robust institutional interest in the metal. Despite the dollar index's rise, supported by global political risks, which hasn't deterred gold's ascent, the inverse relationship between them persists. Nonetheless, declining real yields and rising safe haven inflows dominate the market landscape. Technically, gold is moving within a clear ascending channel, retaining its position above all major moving averages.