Will gold rise to $5000? The gap between institutional forecasts and market reality

What do institutions think about this wave of gold market? Recently, U.S. banks made a bold prediction: by 2026, gold prices could reach $5,000 per ounce. It sounds a bit outrageous at first, but a closer look at their logic is worth considering.

The Supporting Points Behind the Price Forecast

U.S. banks expect the average price of gold next year to be around $4,538 per ounce, which indicates there is still considerable room for growth from the current price. The core reasons supporting this judgment are not complicated: first, ongoing uncertainty in U.S. economic policies; second, the still-loose global liquidity environment. These two major factors have not changed significantly, so gold’s appeal as a safe-haven asset remains.

Supply Tightness and Demand Imbalance

More interesting is the pressure on the supply side. Mineral supplies remain tight, and inventories are low, directly increasing gold’s scarcity. Meanwhile, there is a clear structural imbalance on the demand side—some markets are hot, others are relatively cold, and overall demand cannot be evenly distributed. This supply-demand mismatch objectively lays the foundation for price increases.

The Dual Nature of Market Valuation

Interestingly, U.S. banks believe gold is currently in an “overbought” state, but at the same time say it is “under-allocated.” This seems contradictory but actually reflects the true picture of the market: in the short term, prices have indeed surged too high, but from a long-term asset allocation perspective, the proportion held by institutional investors and central banks is still below historical levels. In other words, there is room for additional purchases.

The Linkage with Other Precious Metals and Industrial Products

U.S. banks have also raised their price forecasts for copper, aluminum, silver, and platinum, with the exception of palladium, which has been downgraded due to oversupply. This reflects a divergence in the commodities market—some varieties face tight supply, others have ample inventories, and their pricing logic varies. For investors, it’s not simple to understand the entire commodities market with a single logic.

Whether gold can reach $5000 as hoped depends on the subsequent direction of U.S. economic policies, but the current supply-demand landscape indeed provides reasons for prices to rise.