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Investing.com -- Gold prices have surpassed $4,000 per ounce, supported by “geopolitical risks, fiscal uncertainties and threats to Fed independence,” but HSBC sees a potential peak ahead for the yellow metal.
The bank said rallies could “continue into 2026 aided by official sector buying,” but expects the surge to “ebb in 2H26, with end of Fed cutting cycle, low physical demand and supply gains.”
HSBC noted that gold has “hit a series of fresh record highs in real and nominal terms” and is “going higher in 2026.”
The rally, it said, is driven by a “powerful mix of safe-haven and risk-off purchases,” helped by “USD weakness, economic and policy uncertainty and more recently threats to Fed independence and the US government shutdown.”
The bank added that mounting fiscal deficits in the US and other nations are encouraging gold demand and forecast a volatile trading range of “USD4,050–3,700/oz” for the rest of 2025, widening to “USD4,400–3,600/oz” next year, with “prices peaking in 1H26.”
However, HSBC cautioned that if fewer rate cuts than projected by the Fed are delivered this year and next, this “has the potential to at least curb the rally.”
It expects year-end prices of “USD3,950/oz for 2025 and USD3,800/oz for 2026.”
The bank said “official sector buying is a cornerstone of the rally,” but noted that “high prices are encouraging greater supply and reduced physical demand.”
It added that “mine output looks set to rise” while “high prices are sharply eroding jewelry and coin demand in key consumer countries.”