Gold Smashes Through $3,800 Barrier! Biggest Surge in 46 Years, Wall Street Analysts Say Rally Will Continue

Early Monday, spot gold broke past $3,800 per ounce, hitting a new all-time high with a daily gain of over 1%. Spot silver climbed 2.26% to $47.09 per ounce.

 

Year-to-date, spot gold has soared nearly 45%, outpacing all other major asset classes and marking its biggest annual gain since 1979.

 

 

Global Investors Keep Pouring into Gold

Gold’s rally this year is fueled by several factors.

 

The Fed kicked off its first rate cut of the year in September, with markets expecting more cuts in the next three months. Rising geopolitical risks have also boosted safe-haven demand, and global gold ETFs are seeing strong inflows.

 

Bank of America reported Friday that $5.6 billion flowed into gold markets last week, with a record $17.6 billion over the past four weeks.

 

BofA noted gold is tactically “overbought” but structurally “under-owned,” making up just 0.4% of its private clients’ assets. The bank remains bullish, signaling expectations of further price gains.

 

Invesco’s global macro strategist Arnab Das echoed this, saying gold’s rally still has legs.

 

“We see no real substitute for gold to hedge U.S. risks, and central banks will keep buying,” Das said. “To me, central banks are buying gold because they see no fiat currency as a dollar alternative.”

U.S. Risks Drive Gold’s Surge

The World Gold Council points to U.S.-related risks as the main driver of recent gold price gains, citing two key factors.

 

First, signs of a slowing U.S. economy suggest the Fed will cut rates further, reducing the appeal of holding dollar-based cash reserves compared to gold.

 

Second, growing threats from the Trump administration to the Fed’s independence have raised concerns about the stability of the dollar and U.S. Treasury markets.

 

 

Additionally, central banks have been boosting gold reserves in recent years to reduce reliance on the dollar.

 

Wall Street banks are broadly optimistic about gold’s outlook. Earlier this month, Deutsche Bank raised its 2026 gold price target by $300 to $4,000 per ounce. Barclays strategists said in a Sunday report that gold doesn’t appear overvalued relative to the dollar or U.S. Treasuries, and prices should include a premium for risks to Fed independence.

 

In stark contrast to gold’s strength, the dollar has fallen over 9% since the start of 2025, driven by concerns over Fed independence and trade war prospects. This fundamentally boosts the value of dollar-denominated gold.