Gold catches its breath as bulls keep their eyes on $5,000

NEW YORK (October 31) The gold market is ending its second week in negative territory as prices hover around $4,000 an ounce.

In this initial correction, gold has dropped about 11% from last week’s highs. While lower prices can’t be ruled out in the near term, the market appears comfortable at these elevated levels.

The pullback hasn’t dented long-term optimism. At the London Bullion Market Association’s annual Global Precious Metals Conference, delegates predicted gold would test resistance just below $5,000 an ounce by this time next year—a roughly 25% gain from current prices. This marks the most bullish outlook from LBMA participants in years, following two straight years of underestimating gold’s rally.

Major banks including HSBC, Bank of America, and Société Générale share similar forecasts, all calling for gold to hit $5,000 an ounce in 2026. The British research firm Metals Focus also expects gold to reach $5,000 and silver to hit $60 next year.

Despite recent volatility, analysts say gold remains well supported by global geopolitical uncertainty and expectations that the Federal Reserve will loosen monetary policy, weakening the U.S. dollar.

Not everyone is fully bullish. The World Bank expects only a 5% gain in gold next year, while Natixis sees prices averaging around $3,800 an ounce in 2026. Yet even these cautious forecasts aren’t bearish.

“Despite the anticipated moderation, prices are envisaged to remain more than 180 percent above their 2015–19 average in 2026,” the World Bank said in its report.

It’s hard to be bearish when central banks continue to accumulate gold to diversify their reserves. The World Gold Council reported that central banks bought roughly 200 tonnes in the third quarter and are on track to purchase 750 to 900 tonnes this year.

Even after buying more than 3,000 tonnes over the past three years, demand remains strong. At the LBMA conference, Heung-Soon Jung of South Korea’s central bank said the institution is considering additional gold purchases over the medium and long term—their first since 2013.

For now, prices are likely to consolidate, but many analysts see opportunities to build strategic positions ahead of gold’s next major rally.

That’s it for this week. Have a great weekend.

KitcoNews