Witnessing history again! Gold breaks above 3,690 intraday—will it hit 4,000 next year?

Due to market expectations that the Federal Reserve will restart its rate-cutting cycle this week, gold prices have reached new highs. Spot gold on Tuesday surpassed $3,690 per ounce for the first time in history during intraday trading, aiming for the $3,700 mark. The US Dollar Index fell to its lowest level in more than seven weeks, which also supported the rise in gold prices.

Traders and industry experts say that as gold continues to hit historical highs, various signs indicate that its rally will continue until the end of this year, but before breaking through the $4,000 per ounce milestone in 2026, a healthy correction is likely to occur.

Expectations of Federal Reserve easing, ongoing geopolitical tensions, concerns about the Fed's independence, and strong drivers such as massive gold purchases by central banks have prompted investors to flock to this precious metals market.

“The long-term bullish pattern for gold remains unchanged, especially as demand from central banks and ETFs continues to grow at an even faster pace,” said Renisha Chainani, Head of Research at Mumbai refiner Augmont, during the India Gold Conference in New Delhi.

“However, gold is currently in an overbought range, and a 5%-6% correction may occur in the short term, followed by a consolidation phase, after which it will rise again. In 2026, it is expected to break through $4,200 and set a new historical high,” she added.

Since the beginning of this year, gold prices have risen by about 40%, with a 27% increase in 2024 alone.

Almost all industry participants at the conference expect that, thanks to US rate cuts, strong investment demand, and geopolitical risks, the gold bull market will continue until 2026.

“Analysts have already predicted that gold prices will reach $4,000 in 2026, but the exact timing is hard to say. Compared to all the forecasts we have seen, gold has reached its target levels much faster than expected,” said Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery.

The market generally expects the Federal Reserve to announce a rate cut at the end of its monetary policy meeting on September 17. Previously, US President Trump had been pressuring the Fed to cut rates and had repeatedly criticized Fed Chairman Powell for acting too slowly.

Gold has always been a popular choice for hedging geopolitical and economic risks, and it also benefits from a low interest rate environment.

“Gold prices are in uncharted territory, and previously did not stay long in the $3,400 and $3,500 range,” said Philip Newman, Managing Director of consulting firm Metals Focus, adding that the company expects gold prices to climb to around $3,800 by the end of the year.

“After this rally, a correction may occur in the future, but we also believe that this is a buying opportunity for investors waiting on the sidelines. In 2026, gold prices are expected to break through $4,000,” he said.

As for silver, which has both investment and industrial attributes (used in electronics and solar panel manufacturing), it has also performed brilliantly, driven by strong gold prices, market concerns about supply shortages, and robust physical demand.

On Tuesday, spot silver reached as high as $42.768 per ounce, marking the highest level in 14 years.

“In addition to traditional industrial uses, rising investor interest has also provided strong support for silver prices,” said Chirag Thakkar, CEO of Amrapali Group Gujarat, a major silver importer in India.