State Street: Gold Rally Echoes 1970s Boom
Gold is on track for its strongest year since 1979, with State Street Investment Management forecasting a 75 percent probability that bullion breaches $4,000 per ounce by early 2026.
The October 2025 «Monthly Gold Monitor» highlights how a mix of macroeconomic, geopolitical, and structural factors are pushing the precious metal into uncharted territory.
Analysts argue that $3,500/oz now represents a key support level for gold. While a 7-8 percent correction could occur in the coming quarter – especially amid historically weak ETF flows in November and December – such dips are expected to be short-lived and met with buying demand.
Dollar’s Decline Fuels Rally
The steepest annual drop in the dollar since the 1970s has been a major tailwind for gold. As the Federal Reserve resumes its rate-cutting cycle, the weaker greenback makes bullion more attractive.
Global asset manager State Street notes that «gold is benefitting from denomination effects» as investors hedge against a softening US currency.
ETF Investors Return in Force
Gold ETF inflows are the strongest since 2020, with September 2025 posting a record monthly inflow in dollar terms. Despite the surge, total physical holdings remain below pandemic peaks – leaving room for further upside.
State Street highlights that «bullion ETF inflows can materially tighten gold supply/demand balances» and are a primary driver of record prices.
Stagflation and Safe-Haven Demand
Concerns over a weakening US labor market and the re-emergence of inflation risks have fueled stagflation fears. Gold’s historic outperformance in slow-growth, high-inflation regimes continues to attract investors seeking protection.
At the same time, central banks remain steady buyers, and Chinese retail demand has surprised to the upside, with imports surging over 100 tonnes during the summer.
Uncertainty Premium Keeps Gold Shining
Global political and economic uncertainty – from tariff disputes to the threat of US government shutdowns – has widened risk scenarios, adding what State Street calls an «uncertainty premium».
This has helped gold remain resilient even against a backdrop of record US equity valuations and relatively low market volatility.
Outlook: Momentum Carries Into 2026
State Street’s gold strategists conclude that 2025 is already a landmark year for the metal, but the structural case for higher prices remains intact.
With strong ETF inflows, sustained central bank demand, and a softening dollar, the question is no longer if gold will cross $4,000 – but when.
