State Street Investment Management's latest gold monitoring report indicates that gold prices are being revalued upwards. Following the historic bull market of 2024-2025, prices are expected to reach new highs within the next 6 to 9 months, breaking through the $5,000 per ounce milestone.
A surge in global government and corporate debt in 2025 is underpinning gold demand. With stock market valuations elevated and uncertainty rising, gold is serving its role as an effective hedge.
Central banks continue to purchase gold, supporting inelastic physical demand and providing a solid foundation for prices. Gold ETFs saw record-high inflows in 2025 (in USD terms), a trend expected to continue into 2026.
Spot gold prices soared by 65% in 2025, marking the strongest real and nominal annual returns since 1979. Notably, the gold ETF market demonstrated resilience from November to December despite pressure from investor profit-taking.
Even though the fourth quarter is traditionally a seasonally weak period for gold liquidity and U.S. stock valuations hit record highs, physically-backed gold ETFs still recorded strong inflows in the final months of 2025.
Given the latest geopolitical developments in Venezuela, coupled with uncertainties such as soaring global debt, U.S. stock-bond correlations, Federal Reserve policy, central bank gold demand, and potential volatility shocks, gold's prospects remain bright heading into 2026.
Considering recent price momentum and the geopolitical landscape, the probability of spot gold breaking $5,000 per ounce this year is now higher than the bank's earlier forecast of 30%.
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