Gold hits $4,000: Driving factors and insights from leading financial institutions

Gold runs around $4,000, see the reasons behind

Later this year 2025, gold prices are expected to continue their upward trend. On October 20, gold hit a historic high of $4,181 per ounce, representing an increase of about 66% since the beginning of this year. In just 7 months, it rose from $3,000 to $4,000, faster than the previous cycle where it took 14 months to rise from $2,000 to $3,000.

In Thailand, 96.5% pure gold also isn’t immune to this momentum. When the Thai gold price exceeds 62,000 baht, the previous forecast of 55,000 baht by experts has to be completely revised upward.

What’s behind the rising gold prices?

Gold’s strength isn’t solely due to chance; it is supported by smart market factors. Here are four key reasons why gold is rising:

Geopolitical tensions and trade wars

Unstable relations among global superpowers create high economic uncertainty. Recently, President Trump announced plans to impose a 100% import tariff on China starting November 1, 2025. Such moves clash with China’s control over rare earth exports and technology, pushing investors toward safe-haven assets like gold.

Interest rate policies and signals from the US Federal Reserve

The Fed has begun lowering interest rates by 0.25% since September 2025, with expectations of continued cuts through October-December. This rate cut causes the US dollar to weaken, making gold more attractive to investors in other currencies. Generally, gold and real interest rates tend to move inversely.

Central bank gold accumulation in emerging markets

This is a highly significant structural factor. Central banks in emerging markets have purchased over 1,000 tons of net gold annually for three consecutive years (2023-2025) and continue to do so in 2025. Meanwhile, global gold reserves have reached 36,699 tons—the highest in a decade. De-dollarization (De-dollarization) is a major driver, especially after the Russian central bank asset freeze in 2022, which made many countries aware of their vulnerability to reliance on a single currency.

The influence of BRICS countries

Reports indicate that BRICS is actively preparing to issue a gold-backed digital currency for international trade among member countries. This challenges the US dollar’s dominance and naturally increases demand for gold.

Cautionary notes: factors that could cause gold to decline

Although the overall trend for gold is bullish, certain conditions could reverse this momentum:

If US-China trade negotiations succeed, tensions will ease, and investors may not need to seek refuge in safe assets.

Profit-taking might occur after an 8-week rally, especially if technical signals indicate overbought conditions (Overbought).

If the US economy shows more strength than expected and the Fed delays rate cuts, the dollar could strengthen, putting downward pressure on gold prices.

If inflation does not decrease as anticipated, the Fed may keep interest rates high, gradually eroding gold’s appeal.

How to trade gold in the current environment

Based on current market signals, traders might consider three approaches:

Approach 1: Wait for a pullback (Buy the Dip)

Since gold is in an uptrend but has risen rapidly, short-term consolidations are possible. Traders can wait for a correction to the first support level around $3,859 or a stronger support at $3,782, then buy with a stop-loss below $3,750. Profit targets are set at $4,084–$4,113.

Approach 2: Test resistance and retest support (Breakout Retest)

After breaking the psychological resistance of $4,000, gold may pull back to test the previous resistance at $3,980–$4,000. If the price rebounds confidently with increased volume, it presents a good buying opportunity. Set a stop-loss at $3,950 and profit targets above $4,100.

Approach 3: Use Fibonacci retracement (Fibonacci Retracement)

Draw Fibonacci from the start of the rally (around $3,500) to the recent high ($4,059). Then look for buy signals at the 38.2% or 61.8% retracement levels, which are natural support zones. Enter on technical confirmation and set stop-loss below the Fibonacci levels.

Leading financial institutions’ outlook: still bullish?

Goldman Sachs analyst Lina Thomas has revised the year-end target to $4,900 per ounce in 2026, up from the previous target of $4,300. Swiss bank UBS Group also maintains a target of $3,500 from December 2025, slightly lower but still positive on gold.

If the $4,900 target materializes, the Thai 96.5% gold price could reach 75,000–80,000 baht by 2026, presenting a more promising opportunity.

Summary of the analysis: why is gold rising?

Gold remains in a strong upward trend driven by various factors—from political instability, Fed rate cuts, to central bank gold accumulation. Despite the risk of profit-taking, the overall trend indicates room for further gains.

For those looking to invest in gold now, it’s crucial to time your entry well. Don’t rush; wait for minor pullbacks to get better prices and maximize profit potential.