Gold Price Prediction: Central Banks, Geopolitics, and the Case for Higher Prices

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Gold’s rally is accelerating, with prices continuing to set fresh all-time highs and reinforcing the view that the precious metal has entered a powerful late-stage bull market.

Spot gold is currently trading near $4,700 per ounce ($4,672 to be more precise), a level few analysts would have imagined just a few years ago. Yet for some economists, this move may still represent only part of a much larger trend unfolding beneath the surface of global markets.

Key Takeaways

• Gold’s rally is being driven by long-term monetary and currency trends, not short-term market speculation.
• Geopolitical tensions and renewed trade risks are accelerating demand for safe-haven assets.
• Central bank accumulation and dollar weakness continue to provide powerful structural support for higher prices.

One of the most bullish voices remains Steve Hanke, professor of applied economics at Johns Hopkins University, who has reiterated his long-standing forecast that gold could ultimately peak near $6,000 per ounce during this cycle. While that target sits well above most mainstream projections, Hanke argues that today’s macro environment closely resembles past periods when gold significantly overshot consensus expectations.

A rally built on monetary fundamentals

Hanke’s thesis centers on money supply dynamics rather than short-term interest rate decisions. He has repeatedly argued that markets focus too narrowly on central bank policy rates while overlooking the deeper impact of liquidity expansion and currency debasement. As the U.S. dollar shows signs of structural weakness, gold’s role as a monetary alternative has become increasingly attractive.

Expectations that the Federal Reserve may be forced to ease policy later this year have added further pressure on the dollar. A softer greenback not only boosts gold prices mechanically, since the metal is priced in dollars, but also strengthens demand from international buyers seeking protection against currency depreciation. Hanke has also warned that growing political pressure on the Federal Reserve risks undermining its perceived independence, a development that could further accelerate flows into hard assets.

Geopolitical stress and trade risks reshape investor behavior

Beyond monetary factors, the global political landscape has become a major catalyst for gold’s surge. Rising geopolitical tensions have reignited demand for safe-haven assets. In periods of heightened conflict risk, investors tend to prioritize capital preservation over returns, a dynamic that has consistently favored gold.

Trade tensions are adding another layer of uncertainty. Renewed threats of tariffs have unsettled equity markets and revived fears of a broader trade confrontation. As volatility spreads across currencies and stocks, gold has benefited from its status as an asset that sits outside the global trade system and political alliances.

Central banks quietly provide long-term support

One of the most underappreciated drivers of the current rally is sustained central bank demand. Monetary authorities, particularly in emerging markets, continue to accumulate gold at a pace close to record levels. This steady buying reflects a strategic effort to diversify reserves away from the U.S. dollar and reduce exposure to geopolitical and financial risks.

Unlike speculative flows, central bank purchases tend to be persistent and price-insensitive, creating a strong foundation beneath the market. This structural demand has helped gold absorb profit-taking episodes and maintain its upward trajectory even during periods of short-term consolidation.

Major financial institutions broadly share a constructive outlook, though most remain more conservative than Hanke. Several major banks see gold gravitating toward the $5,000 per ounce range under current conditions. However, analysts acknowledge that a sharp escalation in geopolitical or financial stress could push prices well beyond that zone.

What could determine the final peak

Whether gold ultimately reaches $6,000 may depend on how several key forces evolve in parallel. A deeper loss of confidence in fiat currencies, sustained dollar weakness, or a major geopolitical shock could all act as accelerants. Conversely, a rapid stabilization of global politics or a decisive tightening of monetary conditions could slow the pace of gains, though few see a full reversal of the trend at this stage.

For now, gold’s continued ability to climb despite already historic prices suggests that demand is being driven by necessity rather than speculation. As investors, central banks, and institutions reassess risk in an increasingly fragmented world, gold’s role as a core reserve asset appears stronger than at any point in recent decades.