Gold’s relentless 2025 rally is reshaping consensus on Wall Street. Recently dismissed by the Wall Street intelligentsia as a barbarous relic, the metal has reclaimed a central role in portfolio strategy – and a growing list of global banks now see a credible path to $5,000 per ounce within the next 18 months.
After breaching $4,000 for the first time in October, gold has forced a rethink among strategists who, until recently, viewed $3,000 as a distant ceiling. The conversation has shifted from whether the rally can last to how high it might run – and what that says about confidence in monetary policy, fiscal discipline, and the global balance of power.
A Consensus Moving Up the Curve
Forecast upgrades have come quickly and broadly across the Street.
- HSBC expects gold to reach $5,000 per ounce in the first half of 2026, raising its 2025 average-price target to $4,600 from $3,950.
- Bank of America shares that view, projecting a $5,000 high and an average around $4,400 next year.
- Société Générale echoes that scenario, citing renewed investor interest and persistent diversification away from the dollar.
- J.P. Morgan now expects gold to average $5,055 in the fourth quarter of 2026, describing the move as a reflection of “gradual de-dollarization” and institutional portfolio rotation. The bank also outlines a longer-run upside case to $6,000 by 2028.
Even the traditionally cautious Goldman Sachs has raised its tone. In a November note, analysts led by Samantha Dart said gold could reach $5,000 as soon as next year if the Federal Reserve’s independence comes under threat – a political risk that could ignite a rotation out of Treasuries and into hard assets.
“Should private investors diversify more heavily into gold, we see potential upside well above our $4,000 mid-2026 baseline,” Goldman wrote. “If just 1 per cent of privately held U.S. Treasuries moved into gold, the price would approach $5,000 per troy ounce.”
That view mirrors J.P. Morgan’s framework but adds a political dimension: even modest erosion of Fed autonomy could trigger inflation fears, weaken the dollar, and accelerate institutional hedging.
A Changing World Order
Underlying the bullish forecasts is a broader structural theme: the quiet rewiring of the post-Cold War financial order.
Central banks across emerging markets – from China and India to Turkey, Singapore, and Poland – have been adding gold at the fastest pace in decades. The motivation is no longer just inflation hedging, but geopolitical insulation: a desire to hold reserves outside the Western financial system and beyond the reach of sanctions.
The share of global reserves held in U.S. dollars has fallen to its lowest level in a generation, while gold’s share of official holdings has reached its highest since the early 1970s. For investors, that shift signals a slow but steady re-pricing of monetary credibility – not a collapse of the dollar, but a diversification away from its monopoly role in global finance. Gold, once the anchor of the old order, is again being treated as the neutral asset in a multipolar world.
What’s Driving the Repricing
Three key forces underpin Wall Street’s optimism:
1. Central-bank accumulation
Official-sector purchases remain well above historical norms. Nations seeking to diversify reserves and reduce sanction risk have provided a durable base of demand. J.P. Morgan estimates central banks and large investors will buy roughly 566 tonnes per quarter through 2026, reinforcing a higher price floor.
2. Return of Western investors
After a decade dominated by Asian demand, Western inflows have returned. Physically backed ETFs are expanding again, futures positions have climbed, and institutional allocators are rebuilding exposure. This renewed participation helped gold vault psychological barriers at $3,000 in March and $4,000 in October, before briefly touching $4,380.
3. Persistent macro and policy uncertainty
Rate-cut expectations, record fiscal deficits, and doubts over long-term U.S. monetary discipline have re-established gold as a structural hedge. For banks like Goldman, the potential politicization of the Federal Reserve now sits alongside inflation, trade frictions, and geopolitical fragmentation as a key catalyst for sustained demand.
The $5,000 Question
Where the major houses diverge is not on direction but on composition of demand. HSBC, BofA, and SocGen see $5,000 driven by continued central-bank buying and sticky investor flows. J.P. Morgan’s model implies a similar outcome by late 2026, while Goldman’s scenario depends on capital rotation prompted by political risk. More conservative banks such as Morgan Stanley and Deutsche Bank argue that softer jewelry demand and a moderation in inflation expectations could cap prices near $4,000–$4,500. Most agree that volatility will be the cost of participation. HSBC pairs its $5,000 forecast with warnings of choppier trading and possible consolidation later in 2026.
A Reuters survey of 39 analysts now places the average 2026 price at $4,275, with a wider range of estimates than in previous polls.
Structural Tightness in Supply
Beyond macro trends, physical supply constraints are reinforcing the rally. Global mine output is expanding slowly, constrained by environmental regulation, permitting delays, and ESG costs. Options markets show dense open interest above $4,000, hinting at potential for outsized swings if momentum accelerates. Meanwhile, vault and ETF data suggest that large holders – including sovereign and institutional investors – are less price-sensitive, treating gold as a quasi-reserve asset rather than a trade. That dampens selling pressure during corrections and tightens liquidity when demand spikes.
Implications for Investors
For portfolio managers, the question is no longer whether gold deserves a place in diversified portfolios, but how much exposure is appropriate – and in what form. Bullion, ETFs, and mining equities are all attracting renewed attention as long-term hedges against fiscal and geopolitical volatility. Across Wall Street, the consensus range now sits between $4,300 and $5,000 per ounce for 2026. Above or below that band, nearly all agree on one point: gold has entered a new valuation regime, driven by sustained demand, limited supply, and weakening confidence in fiat discipline.
As Goldman’s Samantha Dart put it:
“Gold remains our highest-conviction long recommendation.”
The debate is no longer whether gold can rise – only how far, and under what kind of world order, it reaches $5,000.
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