Daily: Gold’s rally has support

Key arguments

• Gold broke above its recent trading range and climbed above USD 4,250/oz for the first time since June, supported by Chinese institutional buying and ETF inflows.
• Medium- to long-term case for gold is supported by lower real rates, a softer dollar, and central bank buying.
• We expect gold prices to rise toward USD 5,000/oz in the first half of 2027.
• Lower real rates should revive investment demand as inflation moderates and the Fed holds rates steady before easing in 2027.
• A softer dollar and diversification flows remain powerful medium-term supports due to US fiscal and external deficits.
• Central bank buying provides a durable floor for the market, with purchases expected to remain elevated.
• Periods of weakness toward USD 4,000/oz or below may be opportunities to build strategic exposure.
• A mid-single-digit gold allocation is appropriate for investors with affinity for real assets, with broad commodities exposure for diversification.

Corresponding source evidence

1. We expect gold prices to rise toward USD 5,000/oz in the first half of 2027. · H1 2027
2. Lower real rates should eventually revive investment demand. Gold does not pay income, so higher real yields increase the opportunity cost of holding it. But we expect inflation to gradually moderate, allowing the Fed to hold interest rates steady this year before resuming easing in 2027. · Medium-term to 2027
3. Near-term risks remain, especially if US data stay firm, oil prices keep inflation concerns alive, or markets continue to price in a more hawkish Federal Reserve rate path. · Near-term