Could Gold Reach €3,500? Why Some Analysts Say the Rally Is Just Getting Started

Soaring demand, geopolitical turmoil, and fears of dollar instability are fueling bold forecasts for gold. But can prices really top €3,500 ($4,000) an ounce — and hold?

Gold prices have surged to new highs in 2025, recently surpassing €2,800 per ounce — a 29% gain since January. Analysts across major financial institutions are increasingly bullish, pointing to a confluence of factors: inflation concerns, central bank buying, global instability, and spiraling public debt. Many now see gold reaching €3,500 per ounce within the next 12 months.

Wall Street firms like JPMorgan and Goldman Sachs have significantly revised their gold forecasts. JPMorgan expects gold to touch €3,500 by mid-2026, while Goldman has raised its year-end target to €3,200, citing the potential for even higher prices if the economy weakens further. Gold’s traditional role as a safe haven appears more relevant than ever.

Central Banks Lead the Charge

One of the strongest drivers of gold’s recent momentum is massive central bank demand. In 2024, global central bank purchases hit a record 1,086 metric tons. That pace has continued into 2025, with demand averaging more than 700 tons per quarter, according to the World Gold Council.

This surge reflects a strategic pivot, particularly by emerging markets, away from over-reliance on the U.S. dollar. Amid concerns about sanctions, growing U.S. debt, and long-term currency volatility, gold is increasingly seen as a politically neutral store of value.

Bank of America estimates that central banks currently hold about 10% of their reserves in gold and could eventually raise that share to as much as 30%. If that trend holds, it would provide sustained long-term price support.

Global Tensions Reinforce Gold’s Role

Geopolitical instability is another major force pushing gold higher. The ongoing conflict in Eastern Europe, tensions between the U.S. and China, and renewed unrest in the Middle East have all elevated risk premiums in global markets.

As JPMorgan analysts note, rising uncertainty is “limiting the appeal of traditional U.S. assets,” driving investors and governments toward gold as a reliable hedge. Each flare-up — whether a military confrontation, sanctions escalation, or supply chain disruption — has sent gold prices climbing.

Inflation, Debt, and Monetary Shifts

Macroeconomic fundamentals are also strengthening gold’s appeal. Inflation, though below its 2022 peak, remains stubbornly above central bank targets in many countries. Investors are increasingly concerned that structural pressures — such as supply shortages, fiscal expansion, and high energy prices — will keep inflation elevated in the long term.

Meanwhile, U.S. federal debt has ballooned to nearly $37 trillion, stoking fears of dollar debasement. “Gold is the only asset that isn’t someone else’s liability,” said a strategist at WisdomTree — a reminder of the metal’s enduring value during fiscal uncertainty.

With economic growth slowing, central banks are expected to pivot toward interest rate cuts in late 2025. Historically, gold has performed well in such environments, as falling real interest rates lower the opportunity cost of holding non-yielding assets like gold.

Bullish Forecasts Take Shape

Below is a snapshot of key mid-2025 gold forecasts from leading institutions:

Most analysts remain firmly bullish. However, Citi remains skeptical, predicting a pullback if global growth stabilizes and geopolitical risk recedes.

What Could Derail the Rally?

Despite the favorable backdrop, there are risks. A slowdown in central bank purchases would undermine one of gold’s strongest supports. Likewise, a surprise rebound in global growth could shift investor attention back to equities or high-yield bonds, drawing money out of defensive assets like gold.

Falling inflation without an accompanying recession would also pose a threat. If inflation normalizes and real interest rates rise, the rationale for holding gold could weaken. Citi warns that if trade tensions ease and confidence returns to markets, prices could retreat below €2,500.

Conclusion: €3,500 Gold in Sight?

With inflation lingering, global conflict unresolved, and central banks pivoting toward easing, gold’s ascent appears to have room to run. Demand from institutional investors and governments remains strong, while macroeconomic and geopolitical uncertainty continue to dominate the outlook.

While risks of a reversal exist, many analysts agree: gold’s push toward €3,500 is no longer a speculative bet — it’s increasingly a base case. The only remaining question may be how quickly it gets there.