Gold poised for strongest year since 1979;  analysts go bearish

The rally remains intact even after prices fell about 9% from last month’s all-time high above $4,350. The picture is a little more mixed beneath the headline. October 2025 was the blow-off month, with futures punching through $4,350 as investors rushed for hedges during the U.S. data blackout and renewed geopolitical tension.

Since then, the market has cooled into a $3,950–$4,050 band. That pullback tells traders that at least some of the panic bid has washed out and that the market is now trading the fundamentals — central banks, ETFs, and retail investment — rather than momentum alone.

The “why” is unusually clear for gold. First, official-sector buying has stayed strong all year. Several emerging-market central banks kept adding bullion as a long-term reserve diversifier while the dollar was volatile and U.S. fiscal talks were stuck. That official demand is price-insensitive, so it kept a floor under the market even when futures slid off the October highs. Second, ETF flows finally turned positive again in 2025 after two years of redemptions. That gave large investors an easy, regulated way to increase gold exposure without touching the futures market. Third, bar-and-coin sales picked up as spot prices broke record after record — buyers wanted a piece of the rally, even at elevated levels, and in some European and Middle Eastern markets physical demand rose alongside geopolitical risk.

Not everyone thinks the October peak returns quickly. Macquarie analysts said current levels already bake in most of 2025’s bullish drivers: the prolonged U.S. government shutdown that kept investors nervous through October, the expectation of further Federal Reserve easing in early 2026, and the layered conflicts that kept safe-haven demand high. From that vantage point, a market that has already run to $4,350 and then slipped 9% looks “toppy” unless a new shock appears. That doesn’t mean a collapse is coming — just that the market may spend time stabilizing around $4,000 before it can challenge the old high again.

Yet views on the outlook vary. UBS maintained a 12-month price target of $4,200 an ounce and outlined an upside case of $4,700 if political or market stress increases. Goldman Sachs has forecast $4,900 and pointed to steady, structural demand from investors.

Another reason the market is reluctant to short gold aggressively is the 1979 comparison itself. Back then, it took a decisive shift in monetary policy to break the rally. Today, the path for rates is the opposite: investors still expect additional easing in 2026, not a return to 2023-style tightening. As long as policy is drifting lower and central banks are adding metal, the argument for a sustained break under $3,900 is weaker than the argument for holding near $4,000.