Gold (GC=F) futures settled near $4,240 per ounce on Friday, closing out their fourth straight month of gains and bringing the yellow metal back within shouting distance of its record high on firming expectations for a December rate cut.
Dovish commentary from Federal Reserve officials has raised the odds that policymakers will decide to cut interest rates by at least 25 basis points next month. Since gold doesn’t produce income, its relative attractiveness improves when interest rates fall.
Gold hit a record high of $4,336 per ounce on Oct. 20 before falling about 10% through the first week of November. This year, the price of gold has risen more than 60%.
An easing in the US dollar (DX-Y. NYB) and expectations of continued fiscal spending and “run-it-hot” government policies heading into 2026 are also expected to support bullion prices.
“We have a tremendous deficit … we also have a tremendous amount of government spending, and on top of that, we have a tremendous amount of central bank buying,” Michele Schneider, Marketgauge.com chief strategist, told Yahoo Finance on Friday morning.
On Thanksgiving, President Trump said he aims to end the income tax, citing revenue expected from his tariff policy.
“Over the next couple of years, I think we’ll substantially be cutting, and maybe cutting out completely … income tax,” Trump said. “We could be almost completely cutting it because the money we’re taking in is going to be so large.”
Trump’s comments come after floating the idea earlier this month of a tariff “dividend of at least $2,000” for non-high-income earners.
“All of this [talk from Trump] is very inflationary, and that’s what gold is really responding to. I think $4,700 would be a good next target,” Schneider said, referring to her 2026 price forecast.
Following the largest one-day sell-off in over a decade, Wall Street analysts have remained bullish on the price of gold. The precious metal remains on pace for its best year since 1979, driven by central bank purchasing and increased inflows into exchange-traded funds (ETFs).
“We still expect continued central bank buying, alongside private investor flows under Fed easing, to lift gold prices to $4,900 by end-2026, with significant upside if the private investor diversification theme were to gain more traction,” Goldman Sachs analysts wrote earlier this month.
Meanwhile, UBS recently raised its price target on the precious metal to $4,500 per ounce by mid-2026.
“Our view on gold remains bullish,” UBS analysts wrote earlier this week. “We think gold’s role as a portfolio diversifier and geopolitical hedge is undiminished.”
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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