Gold at Record Levels; Major Consultancy Sees $10,000 This Year
Gold continues to rally and on Monday surpassed $5,000 per ounce, driven by safe-haven capital flows as the dollar weakens.
Quick overview
- Gold has surpassed $5,000 per ounce, driven by safe-haven capital flows amid a weakening dollar and geopolitical tensions.
- The metal has seen an 84% increase over the past year, marking its largest annual rise in 46 years, with an 18% gain this month alone.
- Yardeni attributes the rally to a 'geopolitical risk trade,' with escalating tensions leading to increased demand for precious and base metals.
- The firm maintains a bullish long-term outlook for gold, targeting $6,000 by the end of this year and $10,000 by the end of 2029.
Yardeni analyzed the factors behind gold’s recent surge and forecast a bullish outlook for the metal.
Gold continues to rally and on Monday surpassed $5,000 per ounce, driven by safe-haven capital flows as the dollar weakens following a turbulent week marked by geopolitical tensions surrounding Greenland and Iran. As a result, the metal has climbed more than 84% over the past 12 months—its largest annual increase in 46 years—and is up 18% so far this month.
Against this backdrop, Yardeni notes that the current rally is being fueled by a “geopolitical risk trade,” with global tensions contributing to a rapid rise in prices across “all precious metals, many base metals, and rare earth minerals.”
The market research firm explained: “All of this is happening because escalating geopolitical tensions are driving an arms race. Defense companies need metals to ramp up production, and their share prices are also surging.”
Where gold is headed, according to Yardeni
U.S. intervention in Venezuela, negotiations over U.S. military bases in Greenland, and an increased military presence near Iran have all acted as catalysts for gold. These developments were compounded by President Donald Trump’s decision to raise U.S. military spending to $1.5 trillion by 2027, up from $906 billion this year, citing “troubled and dangerous times.”
Yardeni also highlighted that prices of tin, silver, platinum, palladium, and gold have outperformed the broader S&P GSCI commodities index so far this year, while base-metals ETFs continue to closely track rising industrial-metal prices.
Within this context, the firm maintained its long-term bullish outlook for gold:
“We continue to target $6,000 by the end of this year and $10,000 by the end of 2029.”
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