Gold May Dip to $4,000 Amid Rising Rate Expectations

Gold prices may dip towards $4,000 an ounce in the next week due to rising rate expectations and a strengthening US dollar. According to State Street Investment Management's head of gold strategy, this decline is a tactical setback rather than a change in gold's longer-term direction.

The strategist notes that markets have priced in two additional Fed hikes since mid-August, leading to higher nominal and real yields and a stronger dollar. This has caused gold prices to react to peak market hawkishness.

However, the strategist still sees $5,000 as reachable within six months, despite the challenging path due to high real yields. The firm's September report highlights structural demand that does not depend on rates, including Chinese non-monetary gold imports reaching a record 1,000 tonnes in the first seven months of 2026.

Additionally, global gold-backed ETFs drew around $17 billion in August, with US-listed funds experiencing their strongest month since September 2025. Options positioning is also supportive, with longer-dated skews remaining bullish and derivatives flows shifting from put-biased to call-biased.