Gold’s Ascent: The $5,000 Milestone Comes Into View

Gold XC0009655157

The precious metal continues its record-breaking rally, closing the trading week near $4,338 per ounce. Having surged over 60% since the start of the year, gold is on track for its most significant annual gain since 1979. Market attention is now shifting toward a new psychological threshold: $5,000 per ounce.

Recent upward momentum received a significant boost from unexpectedly soft U.S. inflation data. The November rate fell to 2.7%, defying analyst expectations of 3.1%. The core rate also disappointed forecasts, moving lower to 2.6%.

This development has intensified speculation that the Federal Reserve will implement further interest rate cuts in 2026. The current benchmark rate of 3.75% is unlikely to mark the end of the easing cycle. Markets have almost fully priced in an additional reduction by April 2026 at the latest. A lower interest rate environment enhances the appeal of non-yielding assets like gold. Silver, benefiting even more from this dynamic, trades around $67 following an impressive advance of over 130% in 2025.

Institutional Forecasts Turn Bullish

Major investment banks have substantially revised their price targets upward. J.P. Morgan projects gold could reach $5,000 per ounce by the fourth quarter of 2026. Goldman Sachs also anticipates new all-time highs, driven by structurally strong central bank purchases and declining U.S. interest rates.

NAGA offers a more nuanced outlook. Its base scenario, assigned a 50% probability, envisions a consolidation phase between $4,000 and $4,500. A direct rally to $5,000 is given a 30% probability.

Technical Backdrop Remains Constructive

From a chart perspective, the bullish trend remains firmly intact. The 50-day moving average at $4,297 provides substantial support. Should this level give way, the next key support zone awaits near $4,252.

To the upside, the area around $4,356 acts as immediate resistance. A sustained breakout would pave the way for a test of the absolute record high from October 2025, situated just above $4,380.

Central Bank Demand Provides a Solid Foundation

Beyond interest rate expectations, robust physical demand underpins the price. The World Gold Council reported a global record demand of 1,313 tonnes for the third quarter of 2025. Central banks continue to be key buyers, persistently diversifying reserves away from the U.S. dollar.

Ongoing geopolitical tensions in regions like Venezuela and Ukraine contribute a persistent risk premium. As long as these uncertainty factors remain, gold is likely to attract buying interest even during short-term pullbacks. The current momentum suggests the rally is poised to extend into the new year.

Key Data Points:
* Gold settled near the $4,340 mark on Friday.
* 2025 year-to-date performance: over 60% – the strongest annual increase since 1979.
* U.S. November inflation came in at 2.7% versus an expected 3.1%.
* J.P. Morgan forecasts $5,000 per ounce by Q4 2026.
* The Fed's key interest rate stands at 3.75% following recent cuts.