Is the gold bull market not over yet? Fidelity bets that it will rise to $4,000, betting on a dovish Federal Reserve and a weak US dollar.

Fidelity International has stated that with the Federal Reserve cutting interest rates to boost the US economy, a weaker US dollar, and central banks around the world continuing to increase their holdings of gold, the price of gold may reach $4000 per ounce by the end of next year. Multi-asset fund manager Ian Samson expressed a bullish attitude towards the precious metal. After reaching a historical high of over $3500 per ounce in April, the price of gold has seen some pullback, with some cross-asset investment portfolios increasing their holdings of gold recently. "Our bullish outlook stems from the increasingly clear dovish path of the Federal Reserve," Samson said in an interview. He added that over the past year, some funds have doubled their gold allocation from 5%. Additionally, August is typically a weaker period in the market, so diversifying assets makes sense. Gold prices have risen by over 25% so far this year. This is partly due to uncertainties caused by US President Donald Trump's aggressive trade reshaping measures, conflicts in the Middle East and Ukraine, and the continuous support of central banks purchasing gold. However, the range of gold price fluctuations has narrowed in recent months due to progress in US trade negotiations and some relief in concerns about the worst-case global economic scenarios, leading to a slight decrease in safe-haven demand. Samson pointed out the tariffs policy of the Trump administration, saying, "Perhaps the 'doomsday scenarios' that were of concern early this year may be avoided, but ultimately, about 11% of the US economy (the import sector) will face a 'tax' of about 15% - which is a significant tax increase that is expected to drag down economic growth." Fidelity International's optimistic expectations for gold are similar to those of Goldman Sachs, which has stated multiple times in recent quarters that gold prices may eventually rise to $4000 per ounce. However, some institutions are more cautious, such as Citigroup, which predicts a decline in gold prices. Currently, the spot price of gold is around $3310 per ounce. Federal Reserve officials will hold a monetary policy meeting this week. Although no rate adjustments are expected at this meeting, Chairman Jerome Powell may face opposition from some officials who hope to support the slowing labor market, including board members Christopher Waller and vice chairman for supervision Michelle Bowman. Samson believes that if the US economy slows down, the influence of the dovish camp in policymaking may increase, and in a weak economic growth environment, the US dollar tends to weaken. Additionally, as Trump continues to call for rate cuts, Powell (whose term as Fed chair will end in May next year) is likely to be replaced by someone "more inclined" to lower borrowing costs. Gold does not generate interest on its own, so it typically benefits when the US dollar weakens and interest rates fall. Samson added that central banks around the world may continue to purchase gold, and the expanding fiscal deficits (especially in the US) will further strengthen the attractiveness of gold as a hard asset. "Indeed, gold has already risen significantly, but looking back at gold's bull market cycles - for example, from 2001 to 2011, it had an annualized growth rate of 20%; and from 2021 to now, the annualized growth rate of gold is also 20%. Therefore, in a bull market cycle, the current increase may not necessarily be excessive."