State Street Investment Management has stated that gold continues to demonstrate resilience in the face of interest rate and U.S. dollar pressures, and it is maintaining its base-case forecast that gold prices will rise to $4,750-$5,500 per ounce by the end of the first quarter of 2027.

However, given the current headwinds from Federal Reserve policy and a strengthening U.S. dollar, the firm has lowered the probability of this scenario occurring from 70% to 60%, and sees a 35% chance of a bearish scenario in which gold prices are expected to trade within a range of $4,000-$4,750 per ounce over the next six to nine months.

Spot gold prices fell 6.3% in September, while silver declined 9.2% during the same period and commodities dropped 0.6%.

State Street had previously anticipated that the Federal Reserve would adopt a more hawkish stance following the Jackson Hole global central bank symposium. The Federal Open Market Committee raised rates by 25 basis points in September. The overall U.S. yield curve subsequently rose further, pushing the dollar to a two-month high; gold prices came under pressure due to the valuation effect and the rising opportunity cost of holding a non-interest-bearing asset.

On August 25, the market was only expecting a cumulative 1.5 rate hikes (of 25 basis points each) between September 2026 and June 2027, but now expects more than three rate hikes over the next nine months.

U.S.-listed gold ETFs recorded $11.7 billion in inflows during the third quarter, including $3.7 billion in net new money absorbed during the September gold price correction, even as U.S. long-term nominal and real Treasury yields were at multi-decade highs. This not only offset the $5.6 billion in outflows seen in the second quarter, but also reflected that investors continue to view gold as a monetary hedge, an alternative asset outside fiat currency, and an important portfolio diversification tool.

State Street stated that the gold market as a whole remains resilient and is able to digest policy and interest rate fluctuations with relative stability. The structural factors driving this gold bull market are still in place, including record levels of government debt, steady demand for physical gold from central banks and China's retail market, de-dollarization allocation trends, rising geopolitical and economic uncertainty, and the持续 increase in the correlation between stocks and bonds. In fact, rate hikes may further exacerbate debt servicing costs and fiscal imbalances in G10 countries.