Could Gold Hit $4,000 in 2025? Octa Broker Explores the Upside Scenario

Octa Broker examines the forces behind golds remarkable rally — and what might come next.

H2: Geopolitical Tensions as the Main Catalyst

The wars in the Middle East and Eastern Europe remain, and their long-term resolution still seems to be out of reach. The U.S.–China relations have taken a sharp downward turn. The latest installment of hostilities is being acted out in tariffs: the Trump administration has resumed a trade war footing, with China retaliating by raising tariffs on U.S. goods to 125% from 84%. Recently, the USA admitted that the tariffs for China could be increased up to 245%. This intensifying global uncertainty has propelled investors toward safe-haven assets, and none are more tried-and-tested than gold.

H2: Monetary Policy Expectations and Rate Cut Bets

Historically, gold tends to perform better when the interest rates are low. The current U.S. monetary policy outlook suggests a favourable environment for the precious metal. In response to weakening economic signals, the Federal Reserve (Fed) is widely expected to cut interest rates at least twice in 2025. The latest Labour Department data revealed a surprise drop in U.S. consumer prices in March, bolstering expectations of a looser policy stance by mid-year. Market participants now factor in a roughly 30% chance of a full percentage point cut by December.

However, with inflation potentially resurging due to tariffs, the Fed could be forced to reverse course. Such a move might derail golds momentum.

H2: Weak Dollar Boosts Golds Appeal

The U.S. dollar index recently recorded its sharpest decline since 2022, hitting new yearly lows. As Kar Yong Ang, a financial market analyst at Octa Broker, explains: ‘A weaker greenback typically supports gold by making it more affordable for holders of other currencies. This trend, together with the increasing uncertainty, has encouraged strong demand, further fuelling the rally’. Indeed, the increasing demand has been evident since the beginning of the year. In the middle of April, gold fund net inflows hit a record $80 billion year-to-date, according to BofA Global Research.

H2: Central Bank Buying and De-Dollarisation

Another bullish factor for gold is the rise in structural physical demand — especially, when it comes to global central banks that increase their gold reserves at an aggressive pace. People‘s Bank of China raised its gold holdings to a record level in Q1 2025, underscoring the metal’s strategic importance. This structural demand aligns with the broader BRICS-led push for de-dollarisation. Diversifying away from U.S. Treasuries and the dollar, several countries are turning to gold as a reliable store of value — bolstering long-term demand fundamentals.

H2: ETF Flows Reflect Retail and Institutional Demand

The growing optimism among investors regarding gold is also evident in exchange-traded funds (ETFs). Gold-backed ETFs experienced significant inflows in March 2025, particularly in North America. These flows indicate robust interest from both retail investors and institutional players, further tightening the market.

H2: Key Risks to the $4,000 Scenario

Despite the underlying bullish environment, gold may fall short of the $4,000 target and, instead, experience a significant downward correction due to several factors:

Inflation Surprise and Rate Reversal. If tariffs and supply disruptions reignite inflation, central banks may be forced to abandon dovish policies. A Fed reversal to a tightening bias could strengthen the dollar and exert a downward pressure on gold prices — potentially disrupting the bullish narrative.

Geopolitical Stabilisation. A de-escalation of global tensions, particularly between the U.S. and China or in Eastern Europe, could sharply reduce safe-haven demand. While this is not the base case for 2025, it remains a wildcard risk that traders must consider.

Overbought Technical Conditions. Golds sharp rally raises the likelihood of corrective pullbacks. If momentum slows, profit-taking could spark a swift and dramatic sell-off. As with any parabolic move, volatility is inevitable: the price tends to experience short-term downtrends before new all-time-highs (ATH).

Is $4,000 a Fantasy or a Forecast？

A convergence of macroeconomic, structural, and technical factors is pushing gold into uncharted territory. With macroeconomic uncertainty, rate cut expectations, geopolitical tensions, and central bank demand all aligned in support, the $4,000 level is no longer just a theoretical ceiling — it is a plausible next target. Still, the path is unlikely to be smooth. Corrections, sentiment shifts, and external shocks may temper the pace of the rally. However, for long-term holders, the thesis remains compelling.

Trading Contracts for Difference (CFDs) carries a high level of risk and may not be suitable for all investors. Emotional trading can increase this risk. Always trade within your means and understand the risks involved.