$3,500 Gold by Year-End? Here’s What Needs to Happen

This year, gold has firmly broken past $3,000 per ounce, and it seems that the market mood has changed from surprise to acceptance. Two years ago, this price was considered an unreachable ceiling, but today, it’s the new support level. As investors have changed their expectations, one key question remains important: Could gold hit $3,500 by the end of 2025? And if yes, what would drive it there?

What is behind the gold rush?

Gold already had an impressive run in the first half of 2025. Prices jumped nearly 25%, reaching over $3,400 an ounce in April — the highest level ever. In just six months, gold broke more than 40 records, one after another, continuing the rally that started back in 2024.

What was driving this surge? A mix of global tension and investors looking for ways to at least save their money. The conflict in Ukraine still persists, and along with this, there were a number of tensions in the Middle East, shaking the whole market, but supporting the gold prices. Donald Trump’s inconsistent rhetoric has also put its hand there — tariffs and the conflict with China, altogether made investors turn to safe-haven gold. Additionally, a weaker US dollar, which has declined by about 10,5% year-to-date, has made gold more attractive and more pricey in the XAU/USD pair.

Against all this market instability, investor interest was very high. In the first quarter alone, gold ETFs saw $21.1 billion in new money, the biggest increase since early 2022. Central banks also kept buying, adding 244 tons of gold in the first quarter, which is 24% more than the five-year average.

Of course, no rally is smooth, so gold saw a small dip of around 1.5% over the past month.  But calling that a selloff would be missing the bigger picture. What we are seeing is that information pressure has eased: the rhetoric around trade wars has become less acute, and the risks of a large-scale conflict in the Middle East have been significantly decreased. All this combined to put short-term pressure on gold, leading to a slight drop in price.

Will the rally continue?

Despite the recent pullback, current levels don’t look like an exit point; on the contrary, they might become a buying opportunity. Of course, gold is not suitable for every investment strategy, but for those already holding, the case for staying in (or adding more) remains an opportunity. 

From the bigger macro picture, there is also more potential upside than downside. A seasonal cut in U.S. interest rates, a very likely next step for the Fed, would traditionally play straight into gold’s hands. Moreover, inflation is no longer a maybe — the most recent CPI report confirms it. According to it, consumer prices rose 0.3% in the past month alone, which brings the annual inflation rate to 2.7%. 

Why does that matter for gold? Because gold has always been one of the most used hedges against inflation. When the cost of living creeps up and real returns on deposits or bonds start to decrease, investors look for somewhere safe to store value, where gold becomes a natural choice.

Looking ahead, the rest of 2025 will be another strong chapter for gold in terms of central bank demand as well. All signs point to continued buying in the quarters ahead. Even as geopolitical tensions appear to be on pause, the motivation remains the same: the need for diversification. Adding to all this is the continued weakness in the U.S. dollar, so the case for de-dollarisation only gets stronger. And gold is the obvious alternative for the reserves, and we clearly see this trend.

Is an ATH of $3,500 real?

Some forecasts are claiming that gold will hit $3,600 this year, or even $4,000 in 2026. That’s actually possible, but let’s not get carried away. In reality, we will be more likely to see a push-and-pull between $3,300 and $3,500 as markets digest macro shifts and headlines coming and going. Volatility is an integral part of the price now, and while that opens the door for big spikes, it also means sharp corrections are part of the ride.

But here's the key point: gold is not just waving around $3,000 anymore. It has now established a new floor above $3,000, which is both psychological and structural. The price has settled into a range that’s becoming the new normal, and smart money seems more interested in adding to positions than cutting them. And that’s a fundamental shift from the days when $2,000 felt like a huge number.