As investors increasingly look to the U.S. Federal Reserve for clarity on the direction of monetary policy, spot gold began the week by trading at approximately $4,060 per ounce, representing a modest decline from the previous close.
On Monday, gold prices retreated during Asian trading hours, primarily due to growing risk appetite among market participants. This renewed confidence came in the wake of a robust rebound in market expectations for a possible interest rate cut by the Federal Reserve in December.
New York Fed Governor John Williams fueled these expectations with comments indicating that the central bank still sees grounds to lower rates next month. Williams highlighted ongoing risks to the labor market, while also observing that the upward pressures on inflation had recently eased—an outlook that could prompt a more dovish stance from the Fed.
Bank of America’s latest survey underscores persistent skepticism on Wall Street regarding gold’s price trajectory. Only 5% of global fund managers surveyed believe gold will surpass $5,000 per ounce by the end of 2026. Instead, 34% expect gold to remain between $4,000 and $4,500, while 27% anticipate prices landing in the $4,500 to $5,000 range.
In contrast, sentiment on a possible downturn is also significant: 34% forecast gold prices to drop below the $4,000 mark, with 26% viewing the $3,500 to $4,000 range as most likely. Additionally, the survey revealed that 39% of professional investors hold no gold whatsoever in their portfolios.
Notably, gold’s status as “the most crowded” trade has faded after peaking in October—a sign of shifting investment trends as market participants diversify exposure away from the precious metal.
