Gold prices could soon hit a historic high of $4,000 per ounce, driven by ongoing geopolitical tensions, concerns over a potential US government shutdown, and sustained central bank buying. However, market experts caution that the current rally may be nearing its end, with some predicting a price correction in the near future.

On Monday, gold surged to a new all-time high of $3,949 per ounce. In the UAE, 24K gold was trading at a record Dh475 per gram, while 22K was priced at Dh440.

Wael Makarem, Financial Market Strategist Lead at Exness, attributed the surge to heightened geopolitical uncertainty and expectations of interest rate cuts.

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"With concerns over a US government shutdown and signs of a possible slowdown in the country's deficit growth, we could see downward pressure on gold ," Makarem told Khaleej Times on the sidelines of the Forex Expo Dubai.“We're close to $4,000 now, and the momentum hasn't slowed. But investors should be cautious - when markets move up quickly, corrections can be just as swift."

Makarem also noted that gold is currently“super-stretched” compared to its historical performance.“Long-term investors should avoid buying at record highs. It's better to wait for a pullback rather than chasing momentum,” he advised.

Shadi Salloum, Regional Director for Mena at XS, believes gold can reach $4,000 this year without much resistance.

“Gold recently touched $3,930 per ounce. Historically, during periods of geopolitical tension or economic uncertainty, safe-haven assets like gold tend to spike,” he said.

Afshin Setoudeh, Chief Marketing Officer at Traze, echoed similar sentiments, saying gold is likely to hit $4,000 before facing a modest retracement.

“Interest rate trends in the US and Europe will have a stronger impact on gold than the ongoing Israel-Palestine conflict,” Setoudeh said.

“We expect rate cuts soon, and with liquidity shifting from European industries to gold, it becomes an increasingly attractive asset.”

However, he added a note of caution:“Over the past 16 months, major economies have significantly increased their gold reserves, likely in anticipation of a $4,000 rally. But in the last three to four months, gold buying has slowed, except in Spain. That's why I don't see gold reaching $5,000 any time soon. Instead, it may stabilise between $4,000 and $4,300 in the coming months.”

Not all experts are bullish. Murillo D. Voznak, Forex Trading Specialist at Tickmill, anticipates a significant correction in the months ahead.

“My outlook differs from the consensus. The fundamentals suggest a short position. With gold approaching $4,000, the market looks overstretched,” he said.“If global financial markets require liquidity, investors may start offloading gold positions. Between now and February 2026, I expect gold to return to the $3,050 range.”

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