French bank Natixis has lifted its year-end gold forecast from $4,600 to $5,000 per ounce, driven by escalating US debt levels, growing worries over bond market stability, and a market shift in rate expectations that continues to underpin bullion prices. After months of consolidation, gold appears back on track to challenge the $5,000 milestone, with prices now firmly holding key support above $4,000 and poised to close the month with a near 15% gain. Based on current momentum, gold is heading for its best monthly performance since September 1999.

The latest rally began in early August when disappointing economic data started forcing markets to recalibrate their interest rate outlook. Bullion has since attracted fresh buying, partly fueled by the US Treasury's announcement to double its buyback of 10-year and 30-year bonds to $40 billion, a move that comes as total US government debt surpasses $40 trillion. Despite rising opportunity costs of holding gold, market participants are increasingly focused on fiscal stability and bond market integrity, with currency debasement concerns making gold more appealing. The mounting debt and bond market risks are strengthening gold's safe-haven appeal.

Looking ahead, intensifying sovereign debt anxieties are expected to keep providing upward momentum for gold prices, having already been a major driver this month and likely to remain a supportive factor through the rest of the year. Natixis projects average gold prices of $5,000 per ounce through 2027, while silver is seen averaging around $78 per ounce next year.

Wall Street Turns Bullish

Beyond Natixis, several major US banks have recently reaffirmed their bullish stance on gold. Morgan Stanley's metals strategist Amy Gower noted that gold has already hit its fourth-quarter target ahead of schedule and could climb above $5,000 by 2027, though the path may be volatile. The bank highlighted that improving macroeconomic conditions are boosting demand for gold ETFs as expectations of Fed rate hikes fade and the US dollar weakens, with strong central bank purchases and firmer physical demand also lending support. Gold's resilience despite elevated long-term yields suggests investors are increasingly worried about fiscal risks, including high government debt and potential currency debasement.

Goldman Sachs has reiterated its forecast for gold to reach $4,900 per ounce by the end of 2026, driven largely by increased demand for bullish call options that could amplify price swings near key strike levels. The bank's analysis points to derivatives markets emerging as a new price catalyst, with investors increasingly using gold call options to hedge against macroeconomic risks. This rise in options activity could lead to more pronounced upside or downside moves, particularly when prices approach critical strike levels.

UBS commodities analyst Giovanni Staunovo attributes last year's gold surge to rising global debt levels and a weakening dollar, concerns that are now resurfacing. He sees these factors pushing gold to $5,400 per ounce over the next 12 months. Citigroup strategist Dirk Willer projects gold at $5,000 to $6,000 over the coming year, citing Treasury intervention, risks of uncontrolled term premium, a soft dollar, and a resumption of de-dollarization trades. Citi believes gold still has room to rise as the long end of the yield curve comes under control, suggesting investors may need to unwind steepening trades and rotate back into gold while selling dollars.

Deutsche Bank has set its year-end gold target at $4,700 to $5,100 per ounce, supported by two non-price-sensitive demand streams: central bank buying and ETF inflows. Gold ETFs have seen net inflows of roughly 1.5 million ounces over the past 30 days, bringing year-to-date additions to about 4 million ounces, while central bank gold purchases reached $38.88 billion in the first quarter of 2026. According to Bank of America's August global fund manager survey, gold still has upside potential given that market sentiment remains relatively subdued. The survey, released last week, indicates gold is at its most undervalued level since March 2023, with 16% of fund managers considering gold undervalued, up from just 6% in July.

Bank of America global research head Candice Browning Pratt noted that their commodities strategy team's models show current investor buying levels are more consistent with gold at $4,000 per ounce, implying that buying must accelerate further before prices reach $5,000. Central bank purchases have already done their part, with June buying well above the 12-month average, and any dovish signals from this week's Jackson Hole symposium would be positive for gold. Bullish sentiment is also reflected in speculative investors increasing their gold bullish bets for a third consecutive week. CFTC data through August 18 shows managed funds raised speculative gross long positions in Comex gold futures by 5,961 contracts to 154,595, while short positions increased by 1,975 contracts to 12,947. Net long positioning stood at 141,648 contracts, the highest since late September last year, with cumulative net long growth of 18% over the past three weeks and the longest consecutive streak of additions since June.

Despite the clear shift toward bullish sentiment, gold still faces headwinds, as rising oil prices stoke inflation concerns that could force the Fed to hike rates before year-end. TD Securities commodities strategy head Bart Melek remarked that with the Fed yet to signal clearly its readiness to combat higher inflation, dollar depreciation concerns should provide solid support for gold in the coming weeks. However, given that sustained oil price increases could ultimately push short-term rates higher, it may be premature to assert that gold will surge to their $5,350 per ounce target.