Fidelity International expects gold prices to reach $4,000 per ounce by the end of 2026, driven by Federal Reserve rate cuts, a weaker U.S. dollar, and ongoing central bank purchases.

Ian Samson, a multi-asset portfolio manager at Fidelity International, stated that the firm remains bullish on gold. After hitting an all-time high of $3,500 per ounce in April, gold prices have recently been consolidating. Some of the firm’s cross-asset portfolios have increased their gold allocations.

“The reason for this forecast is that we believe the Fed will become more dovish,” Samson said. He noted that some investment portfolios have doubled their gold allocations over the past year—from 5% to 10%. August is also typically a weak month for equities, making diversification a sensible strategy.

Samson added that central banks around the world are likely to continue purchasing gold, and the growing fiscal deficits—especially in the U.S.—enhance gold’s appeal as a hard asset.

“Gold has already come a long way, but if you look at previous bull markets—such as from 2001 to 2011—gold posted annualized returns of 20%,” he said. “From 2021 to now, the annualized return is also 20%. So from a bull market perspective, it doesn’t appear significantly overbought.”

One key driver behind the gold rally is China’s central bank, which has been quietly accumulating gold—possibly in much greater volumes than official data suggests. In 2023, China’s central bank was the largest gold buyer among global central banks, adding 225 tonnes to its reserves.

“Based on my long-term research, China’s gold imports far exceed the volume sold in the private market via the Shanghai Gold Exchange,” said Jan Nieuwenhuijs, a gold analyst at Money Metals. “Industry insiders have confirmed this to me over the years.”

He pointed out that large shipments of gold from the UK to China strongly indicate purchases by China’s central bank. Even when gold prices in Shanghai were lower than in London—making commercial exports unprofitable—shipments from the UK to China remained high. “The only logical explanation is that the People’s Bank of China is secretly buying gold,” he concluded.

Fidelity’s bullish gold outlook aligns with that of Goldman Sachs, which recently suggested that gold could rise to $4,000 per ounce. Citigroup, however, holds a more cautious view on the metal’s future price path.