Gold has a shot at $5,000

It has been more than two weeks since gold prices notched record highs, but the debasement trade that has played a key role in the precious metal’s rally this year is alive and well. The long-term bull case for gold still rests on the “slow-burn debasement trade,” driven by the world’s “unease with perpetual deficits, rising interest costs and the creeping monetization of government debt,” said Stephen Innes, managing partner at SPI Asset Management. The debasement trade refers to investors swapping fiat currencies like the dollar for assets like gold and bitcoin. Read: How one of 2025’s most popular trades is boosting gold and bitcoin — and may keep going during the government shutdown That popular trade may have gone “dormant for now, but it is unlikely dead,” Innes told MarketWatch. See: After gold’s big plunge, here’s what history shows could happen next The debasement trade took a hit after the last Federal Reserve meeting, when expectations for a December interest-rate cut started to decline, said Peter Spina, president and founder of gold news and information provider GoldSeek.com. Prospects for higher rates help to keep real rates above zero, which means “less incentive to own gold, perhaps when short-term yields can pay higher rates over inflation.” Gold may fall by a “few hundred dollars” during a consolidation phase, but when that phase ends, the market should see the strong ongoing fundamentals supporting the metal’s price continue to drive it to new records, said Spina. Purchases by central banks and buyers in Asia, as well as ongoing buying by Westerners who don’t have as much of their assets invested in gold, should help drive prices higher next year — likely to $5,000 and beyond, he told MarketWatch. Many global geopolitical, trade and economic uncertainties remain, said Spina, so gold will continue to “rise as the top monetary asset, currency for central banks and other large institutions looking to protect from the dangers of further fiat debasement.” Pause or peak? Still, gold’s pullback from record highs last month has led many to question whether the move marks a pause in the rally or a peak for prices.

Gold gave back most of its October gains on a “momentum flush-out and stronger dollar,” but geopolitical risk helped the metal hold on to a price gain for the month, strategists from the World Gold Council wrote in commentary published Thursday. The World Gold Council strategists said they see no long-term momentum “sell signals” so far, based on a technical analysis, and that the October weakness in prices likely provided a “healthy and much-needed breather in the core long-term uptrend” for gold. Gold futures have tallied 49 record-high settlements so far this year, according to Dow Jones Market Data. The December contract settled at $3,991 an ounce on Thursday. Prices based on the most active contracts have fallen 8.5% from the most recent record high finish of $4,359.40 on Oct. 20. Year to date, however, gold prices have still gained more than 50%. “Gold’s pullbacks are not conclusions, they’re just calibrations. They’re pauses that prepare the market for what comes next,” said Jan Skoyles, U.K.-based head of marketing at precious-metals dealer GoldCore, in a video posted on YouTube on Thursday. Gold’s pullbacks are not conclusions, they’re just calibrations. They’re pauses that prepares the market for what comes next.’ — Jan Skoyles, GoldCore The world doesn’t look more stable now than it did when this rally began, she said. Debt is higher, geopolitical issues have worsened and policy discipline is a “relic” of the past, so “every pillar that was supposed to restore confidence is weaker than before.” That means this pullback in gold isn’t “the warning sign, but the opportunity” for investors, said Skoyles. Central banks certainly see it that way, she said. They’re buying gold at a pace that would have been “unthinkable a decade ago.” This year, central banks are expected to add more than 1,000 metric tons to their global gold reserves for a fourth year in a row, according to the World Gold Council. These purchases are “not speculative…they are defensive measures,” said Skoyles. “They are the acts of institutions that have realized that the system that they’ve designed has outgrown their control.” And U.S. government debt and politics are sure to play notable roles for gold in the new year. “As fiscal arithmetic tightens and political cycles reopen, the 2026 horizon could easily reignite gold’s role as the mirror of sovereign credibility,” said SPI Asset Management’s Innes. Between now and that next ignition point, however, “there’s likely to be plenty of noise: false starts, short squeezes and periodic bouts of liquidation,” he said. For traders thinking in cycles rather than headlines, “the destination remains higher,” Innes said.

Hon Brian Scavo