Gold Taps $5,000 Mark as Global Banks Raise Forecasts

Global banks continue to raise their price forecasts for gold, amid bets that the upward trend will persist, supported by geopolitical risks, inflation trajectories, and expectations for U.S. interest rates, with the $5,000-per-ounce level now strongly featured in estimates by major financial institutions.

Citigroup raised its gold price target for the next three months to $4,800 per ounce, while maintaining its outlook for the six- to 12-month horizon at $5,000 per ounce, signaling continued optimism for the precious metal in the near term. The bank believes the gold rally still has room to run, given expectations of falling real interest rates, a shift toward a less hawkish stance by the U.S. Federal Reserve, and the possibility of a medium-term de-escalation of tensions related to the Strait of Hormuz.

In a similar vein, JPMorgan expects gold to trade in the near term within a range of $4,500 to $5,000 per ounce, as investors await U.S. inflation data and signals from the Jackson Hole symposium regarding the direction of U.S. monetary policy.

JPMorgan places inflation data at the forefront of key drivers for the yellow metal, noting that inflation readings below expectations could push gold back toward the $5,000-per-ounce level within a week. Conversely, higher-than-expected inflation data could exert downward pressure on prices and trigger a retest of the 200-day moving average.

Markets are awaiting the release of the U.S. Personal Consumption Expenditures (PCE) Price Index for July, the Federal Reserve’s preferred inflation gauge, while attention is also focused on Fed Chair Jerome Powell’s speech on Friday at the Jackson Hole event. These data points hold particular significance for gold investors, given the metal’s close linkage to expectations for real interest rates and the trajectory of U.S. monetary policy, making any shifts in inflation or rate expectations a key factor influencing price directions in the coming period.

According to CME Group’s FedWatch tool, traders are pricing in a 61.6% probability that the Federal Reserve will keep interest rates unchanged next month, underscoring that decisions by the U.S. central bank and inflation data remain the primary factors that could determine whether gold continues its path toward the $5,000-per-ounce mark.