Interest rate repricing + US Treasury crisis! Gold bull market ushers in “dual engines”; Natixis forecasts a rise to $5,000

　　Natixis precious metals analyst Bernard Dahdah raised his year-end gold price forecast on Tuesday from $4,600/oz to $5,000/oz, citing the continuously expanding US debt size, increasing concerns about bond market stability, and ongoing market repricing of interest rate paths as factors that continue to support gold prices.

　　After several months of correction, gold appears to be back on track towards the $5,000/oz mark. Dahdah pointed out that gold prices have now firmly held above the critical $4,000 support level and are on track to end the month with a monthly gain close to 15%. Based on the current trend, gold is heading for its best single-month performance since September 1999.

　　Dahdah noted that the current gold rally began in early August when disappointing economic data forced the market to readjust interest rate expectations. Meanwhile, gold has recently seen renewed buying, partly due to the US Treasury announcing it would double the buyback size for 10-year and 30-year Treasuries to $4 billion. This move came as the total US national debt surpassed $40 trillion.

　　He stated: "Although the opportunity cost of holding gold has risen, the market is increasingly worried about fiscal and bond market stability." “As a result, concerns about currency devaluation have made gold more attractive.” He added that rising debt and bond market risks are enhancing gold's appeal as a safe haven asset.

　　Looking ahead, Dahdah expects that rising sovereign debt concerns will continue to give further upside momentum to gold prices. These concerns have already been a key factor behind gold’s rally this month and are expected to continue supporting prices for the rest of the year. The analyst forecasts that by 2027, the average gold price will reach $5,000/oz, while next year silver prices will hit around $78/oz.

　　Market consensus is bullish

　　Besides Natixis, several major Wall Street banks have also recently expressed further bullishness on gold. Morgan Stanley’s metals and mining commodities strategist Amy Gower said in a report last week that gold has already surpassed the bank’s Q4 target price and could rise above $5,000 by 2027, although the process may be volatile. The bank said improving macroeconomic conditions are boosting demand for gold ETFs, as expectations for Federal Reserve rate hikes fade, the dollar weakens, and strong central bank buying and robust physical demand support gold. Despite persistently high long-term yields, gold remains resilient. The bank added that this suggests investors are increasingly worried about fiscal risks, including high government debt and potential currency devaluation.

　　Goldman Sachs, meanwhile, reiterated its gold price forecast, predicting gold would reach $4,900/oz by the end of 2026. This forecast is mainly driven by increased call option demand, which could amplify volatility near key strike prices. The bank's analysis pointed out that the derivatives market is becoming a new price driver, with investors increasingly using call options in gold to hedge macroeconomic risks. This rising demand for options may cause larger moves up or down in gold prices, especially as gold approaches key strike levels.

　　UBS commodity analyst Giovanni Staunovo noted that surging global debt levels combined with a weakening US dollar were the underlying factors behind last year’s gold rally, and now these concerns are returning. “In our view, in the next 12 months, these factors will push gold prices up to $5,400/oz.”

　　Citi strategist Dirk Willer sees gold in the range of $5,000 to $6,000/oz over the next year, mainly due to Treasury intervention, risks of uncontrolled term premia in US Treasury yields, a weak dollar, and renewed “de-dollarization” trades. Citi believes as the long end of the yield curve is brought under control, there is still upside for gold. “Investors may need to end yield curve steepening trades, pivot back to gold, and sell the dollar.”

　　Deutsche Bank set a year-end benchmark target for gold at $4,700 to $5,100/oz, supported by two price-insensitive factors: central bank gold buying and ETF inflows. Gold ETFs saw a net inflow of about 1.5 million ounces in the past 30 days, and about 4 million ounces added year-to-date, while central bank purchases in Q1 2026 reached $3.888 billion.

　　According to Bank of America’s August global fund manager survey, gold still has further upside potential as market sentiment remains subdued. The survey, released last week, said gold appears to be in its most undervalued period since March 2023. The survey found that 16% of fund managers think gold is undervalued, up from only 6% in July.

　　Candace Browning Pratt, head of global research at Bank of America, stated in a report last Sunday: "Our commodities strategy team models suggest current investor buying levels are more consistent with gold at $4,000/oz, and investor buying must accelerate before gold can reach $5,000. Central bank gold buying has already done its part, with June purchases well above the 12-month average. If this week’s Jackson Hole Annual Economic Symposium releases a dovish signal, it will be bullish for gold.”

　　Bullish sentiment on gold is also reflected in the fact that speculative investors have increased their long bets on gold for the third consecutive week. According to the US Commodity Futures Trading Commission (CFTC) position report for the week ending August 18, managed funds on Comex increased their speculative gross long positions on gold futures by 5,961 contracts to 154,595 contracts; short positions rose by 1,975 contracts to 12,947 contracts. Net long positions in gold stood at 141,648 contracts, the highest since late September last year. Over the past three weeks, net long positions in gold have grown 18%, marking the longest consecutive rise since June.

　　Although market sentiment has turned clearly bullish, gold still faces headwinds—rising oil prices are fueling inflation concerns and could force the Federal Reserve to hike rates before year-end. TD Securities head of commodities strategy Bart Melek stated: “Since the Fed has yet to give a clear signal that it is ready to combat higher inflation, concerns about dollar devaluation should provide good support for gold in the coming weeks. However, given that crude oil prices continue to rise, potentially driving short-term rates higher, it is too early to assert that gold will soar to our $5,350/oz target.”

Editor: Guo Jian