When might we see $5,000 Gold?
Gold (Bybit: XAUUSD+) has posted yet another record high today (Wed, Dec 24), briefly breaching the psychologically-important $4500 level on this Christmas eve.
This precious metal is clearly enjoying a year to savor, having soared 71% (at the time of writing) so far this year.
2025 is set to mark gold's biggest annual climb since 1979 (gold surged 126.5% that year, some four and a half decades ago)!
3 Reasons Why Gold is Soaring
1) US-Venezuela tensions
The Trump administration has got Venezuela in its sights, with the former having blockaded the latter's oil tankers amid claims of drug trafficking.
Gold has long been seen as a safe haven asset, meaning investors buy gold to help protect their wealth during times of great fear and uncertainty.
Hence, rising geopolitical tensions have fuelled this latest surge in safe haven gold.
NOTE: The blockade of oil tankers has also sent Brent Crude Oil (Bybit: UKOUSD) surging by more than 6% since Dec 16th (market fears of lessened supply sent buyers scrambling to buy oil, driving its prices higher).
2) Fed rate cuts
Gold prices tend to go up at the thought of US interest rates going down.
With markets still expecting the Federal Reserve - the world's most influential central bank - to cut US interest rates twice more in 2026, this is lowering the opportunity cost/boosting the appeal of holding on to zero-yielding bullion.
3) ETF and central bank purchases
The People's Bank of China (PBoC) has net bought gold for a 13th straight month in November 2025.
Central banks around the world have added 28% more tons of gold in Q3 than in Q2 2025, according to the World Gold Council.
Meanwhile, the world's biggest bullion-backed exchange traded fund (ETF) - the SPDR Gold Shares - now has over US$ 152.2 billion in assets, with its bullion holdings rising over 20% so far in 2025.
Even Silver's surfing higher
Silver (Bybit: XAGUSD) has broken above $70 for the first time in its history, and is outperforming its more illustrious precious metals cousin, Gold.
So far this year, Silver has climbed by 148%!
That's double gold's year-to-date performance, with both set for their biggest annual gains respectively since 1979!
Similar to the reasons for gold's surge, silver has risen amid soaring demand from ETF investors in light of expectations for more Fed rate cuts.
Furthermore, silver investors are concerned of lacking supply, especially following the historic "supply squeeze" in London back in October.
NOTE: Silver has more use in the industrial world than gold; e.g. silver is used in circuit boards, EVs, batteries, medical devices, and solar panels.
Silver's lower price per troy ounce compared to Gold ($70 vs. near-$4500) also makes it more attractive among retail investors.
When can we see Gold hit $5000?
According to Bloomberg's model, we could see Spot Gold cross above the $5000 line by March 2026.
Will Gold fall?
From a technical perspective, gold's surge has brought the post price well into "overbought" territory.
"Overbought" simply means investors drove up the price too much, too fast.
Judging by the 14-day relative strength index (RSI), the textbook threshold for "overbought" conditions is the 70 line.
Going back to the chart at the top, now that gold's 14-day RSI has breached 80, we could see some immediate pullback in prices, with XAUUSD+ already seeing immediate resistance around the psychologically-important $4500 big, round number.
However, as long as the fundamental reasons (Fed rate cut expectations, safe haven demand, central bank purchases) listed above remain intact, gold should continue posting new record highs in the months ahead.