In the Q4/2025 outlook report, Fawad Razaqzada - Market Analyst at City Index and FOREX.com commented that gold prices could reach 4,000 USD/ounce by the end of this year, but did not rule out risks.
With an increase of more than 40% since the beginning of the year and on track to record the best annual increase since 1979, Mr. Razaqzada said it was difficult to ignore the increase in gold, despite emphasizing that the precious metal was in a state of extremely overbought.
"The signs of overbought are flickering, but price action is still steady in the uptrend. When there is no clear sign of reversal on the chart, it can be considered a confirmation of what we already know: the trend is very strong" - he wrote.
Technically, Razaqzada said the key support level was $3,500 an ounce, with small supports at $3,700 and $3,600 an ounce. Under these milestones, $3,435/ounce is a notable area, marking the foundation of the breakout in the third quarter of 2025.
If it breaks through this area, the scenario will be more complicated, with the red line at $3,300/ounce - the bottom of the last big fluctuations before the recent strong rally began, he said, adding: As long as there is no clear reversal model, the scenario remains unchanged even though the technical indicator is overbought. Every decrease is bought in a healthy goose market.
Although the gold market has begun to show signs of correction risks, Mr. Razaqzada emphasized that the uptrend is still supported by solid fundamental factors.
He pointed out that this increase comes not from speculation but from a favorable environment: a weakening USD, strong net buying demand from central banks and loose monetary policy.
In particular, he noted that the US dollar is having its worst year in more than two decades. By the end of September, the Dollar Index (DXY) had fallen about 10%. If the whole year remains around this level, it will be the weakest performance since 2003 - when DXY decreased by nearly 15%.
The main reasons come from concerns about stagnant inflation due to tariffs and the awareness that the US's economic dominance is being challenged. The trend of de-dollarization, as foreign investors diversify away from US assets, is also becoming increasingly evident, he said.
However, the new monetary policy easing cycle of the US Federal Reserve (FED) is expected to continue to put pressure on the USD and create a support for gold. The market is now forecasting at least one more interest rate cut before the end of the year. Some economists believe that if the US government's closure continues, the greater the possibility of the Fed taking stronger action.
See more news related to gold prices HERE...
