Short-term pullback difficult to shake "gold faith"! LBMA representatives predict gold prices to hit $5000 within a year.

Over the past week, the trading prices of gold (spot and futures) experienced a sharp rise followed by a significant decline. However, due to signals of sustained demand expansion from global central banks and investors amid global turmoil, this has not diminished the optimistic sentiment of Wall Street professional investment institutions and retail investors towards the long-term bullish prospects of gold. According to top Wall Street investment institutions such as Goldman Sachs and J.P. Morgan, the upward trend of gold prices, which has set multiple historical highs this year and already surpassed $4000, is not over yet. They believe that the recent short-term correction is just a stumbling block on the bull market path, and they are urging the market to look forward, even suggesting that gold prices may potentially surpass the epic level of $5000 in the future. At the London Bullion Market Association (LBMA) annual conference held in Kyoto, Japan, representatives from the precious metals industry predicted that by next year's meeting on October 5th, the price of gold would be close to $5000 per ounce. Based on a survey of 106 responses, the projected trading price at the time is expected to be $4,980.30, indicating a potential increase of about 27% from current levels. After months of unprecedented rises driven by expectations of Fed rate cuts, continuous purchases from global central banks, and a weakening US dollar, some traders have started taking profit on gold, leading to a pullback from the historical high set last week to around $3,900. Nevertheless, gold prices have still risen significantly by about 50% this year, mainly supported by investor funds seeking hedging against currency devaluation and escalating fiscal pressures in developed countries. Gold prices have been steadily climbing this year, with a particularly rapid rise in recent weeks. Last Monday, gold prices once again hit a new all-time high. However, on Tuesday, market sentiment suddenly reversed for gold and silver, leading to a historic drop in gold prices. On that day, spot gold prices plummeted by as much as 6.3% intraday the largest single-day drop since April 2013, ultimately closing down by 5.3%. Similarly, New York Commodity Exchange December gold futures fell sharply by 5.7%, marking the largest single-day drop in 12 years. The latest addition of bullish outlooks or logical enhancements comes from the Bank of Korea, which announced its plan to increase gold reserves for the first time in over a decade, joining the wave of sovereign government purchases that have been driving the historical rise in the gold market. "The Bank of Korea plans to add gold purchases from a medium-to-long-term perspective," said Heung-Soon Jung, Director of the bank's reserve investment department at the LBMA annual conference. It is understood that the Bank of Korea last increased its gold reserves in 2013. These comments highlight the increasingly active role of major central banks in the global gold trading market. Over the past two years, the massive purchases by monetary authorities from China to Poland have been a key driving force behind the rise in gold prices, even with the influx of retail investors and hedge funds. However, some analysts warn that gold prices may experience a deeper correction. Market strategist John Reade from the World Gold Council stated at the LBMA annual conference that central bank demand is not as strong as before. He cited minutes from the meeting, suggesting that a level of $3,500 per ounce would be "healthy for the gold market, as it remains an extremely high price." The widespread bullish sentiment extends to other precious metals as well. According to the latest survey data from the LBMA annual conference, silver prices could significantly rise to $59.10 per ounce within a year, an increase of about 27% from current levels. The survey data also shows that industry representatives expect platinum and palladium to record double-digit gains. Looking back at historical periods of drastic gold price declines with single-day drops of 5% or even greater it can be observed that such seemingly pessimistic declines may not have a lasting bearish impact. An analysis of the most active gold futures trading data by Dow Jones Market Data shows that since May 24, 2006, after experiencing a single-day drop of 5% or more, gold futures have seen an average increase of about 1.82% within a month. Stefan Gleason, President and CEO of Money Metals Exchange, stated: "We shouldn't expect gold and silver prices to rise in a straight line." He pointed out that drastic adjustments like this week's are "healthy and beneficial," as "bull markets are born on the wall of worry." Meanwhile, top Wall Street institutions including J.P. Morgan maintain a strong bullish outlook on gold. J.P. Morgan predicts that by the fourth quarter of 2026, the average price of gold may reach $5,055 per ounce. "Gold remains our most confident long position asset of the year, and we believe there is further upside potential as the gold market enters the Fed rate cut cycle," said Natasha Kaneva, Head of Global Commodity Strategy at J.P. Morgan. Kaneva noted that the recent sharp decline reflects the market digesting the rare and extremely rapid rise since August, and she added that gold should be viewed in a multi-year perspective, disregarding short-term market fluctuations. Another top Wall Street firm, Goldman Sachs, recently reiterated its long-term bullish stance on gold, maintaining its target price of $4900 per ounce by the end of 2026, and emphasizing that there is even "upside risk" to this forecast. Goldman Sachs believes that the current sell-off is primarily due to speculative position unwinding and spill-over effects from the silver market, rather than deteriorating fundamentals. The real "smart money" including global central banks, ultra-high net worth individuals, and long-term asset allocation institutions continues to flow into gold. Another Wall Street giant, Bank of America, offers a more aggressive forecast. Strategists from Bank of America state that gold prices may surge to $6000 in the spring of next year. Statistics from Bank of America indicate that the allocation of gold assets in global institutional and private client portfolios is still relatively low, at only 2.3% and 0.5%, respectively, indicating that the market's structural long position in gold is not overcrowded.