Spot gold traded near $4,320 per ounce during Monday's Asian session, extending its four-day rally and building on last week's strong momentum, while Asian gold stocks rose collectively. Despite the Fed's third consecutive rate cut announced Wednesday U.S. time, three dissenting policymakers fueled market uncertainty about the extent of further monetary easing in 2026. While U.S. equities saw notable pullbacks Friday, spot gold still gained over 2% weekly.
Gold's steady climb after four straight advances highlights how conflicting Fed rhetoric has intensified rate futures traders' bets on additional easing next year. Rabobank strategist Philip Marey noted the Fed may cut rates to neutral or below by November 2026 to stimulate pre-midterm election growth, suggesting three 25-bp cuts by September 2026—far exceeding FOMC projections.
Dissenting voters Chicago Fed's Austan Goolsbee and Kansas City Fed's Jeff Schmid cited data delays and stubborn inflation as reasons against December's cut. Precious metals typically thrive in low-rate environments as non-yielding assets. Gold has surged 60% this year, while silver has doubled—both tracking toward their best annual performance since 1979.
This rally stems from central banks' sustained physical gold accumulation and institutional shifts from sovereign bonds. WGC data shows monthly gold ETF inflows except May. Goldman Sachs analysts, including Lina Thomas, maintain that central bank buying and private ETF inflows could drive gold to $4,900 by late 2026, citing "multi-year trend" official purchases averaging 70 tons monthly. Their nowcast estimates October's net central bank buying at 49 tons—nearly triple pre-2022 averages—reflecting strategic, price-insensitive demand.
Silver also found support from speculative bets on prolonged tight supply after October's historic squeeze, hitting a record $64.6573/oz Friday. As of 10:30 a.m. Singapore time, spot gold rose 0.6% to $4,327.20, while silver futures gained 1.5% to $62.95 after Friday's 2.5% drop. Platinum and palladium advanced as the Bloomberg Dollar Spot Index held flat.
Wall Street giants like Goldman Sachs and JPMorgan view gold's record-breaking rally above $4,000 as unfinished, with dips being mere "stumbling blocks" en route to potentially $5,000 by 2026. Sensitivity analysis suggests a 1% shift from U.S. Treasuries to gold could push prices toward $5,000 given gold's relatively small market size. Bank of America projects even bolder $6,000 targets by spring 2026 under "currency debasement trade" logic, noting gold's underweight 2.3% institutional and 0.5% private allocations.
At LBMA's Kyoto conference, industry representatives broadly predicted gold nearing $5,000 by next October's meeting.