Gold has smashed through $5,000. Why analysts think the rally may still have further to run

Gold has surged through the psychologically important US$5,000 per ounce level for the first time in history. The move marks a major milestone in what has already been a powerful rally for the precious metal.

Gold is now up more than 17% over the past month as investors seek safe-haven assets amid rising geopolitical and economic uncertainty.

At the time of writing, spot gold is trading at US$5,074 an ounce after accelerating sharply in recent sessions. While some profit-taking is possible after such a strong run, many analysts believe the underlying forces supporting the rally remain firmly in place.

Why has gold surged past $5,000?

One of the key catalysts has been a renewed flight to safety. Escalating geopolitical tensions, including friction between major global powers and ongoing conflict risks, have unsettled markets and boosted demand for defensive assets.

Central bank demand is another major pillar supporting prices. Over the past few years, central banks have been consistently increasing their gold reserves as part of a broader diversification strategy away from the US dollar.

Interest rate expectations are also playing a crucial role. Markets are increasingly pricing in the possibility of interest rate cuts later this year. Lower rates reduce the opportunity cost of holding non-yielding assets like gold, making bullion more attractive relative to cash and bonds.

On top of that, major investment banks have turned increasingly bullish. Goldman Sachs recently lifted its 2026 gold price target to US$5,400 an ounce, citing strong official sector buying and rising private investment demand. Bank of America has gone even further, suggesting gold could reach US$6,000 by spring 2026 if current trends persist.

What does this mean for ASX gold stocks?

The breakout above US$5,000 has put gold miners firmly back in focus on the ASX. Higher gold prices generally translate into stronger margins and cash flows, particularly for producers with disciplined cost structures.

Northern Star Resources Ltd (ASX: NST) remains one of the most closely watched names in the sector. While the company has faced recent operational challenges and higher costs, the stronger gold price provides an important buffer and improves earnings potential over time.

Evolution Mining Ltd (ASX: EVN) has also benefited from the rally. The miner has focused on balance sheet strength and cost control, positioning it well to take advantage of sustained higher bullion prices. Investor sentiment has improved as margins expand and cash generation strengthens.

That said, not all gold stocks will move in line with the commodity. Operational execution, production consistency, and cost management remain critical, even in a strong gold price environment.

Foolish bottom line

Gold moving above US$5,000 shows how strongly investors are responding to current risks. It reflects a powerful mix of geopolitical risk, central bank buying, and shifting interest rate expectations that could support prices through 2026.

The post Gold has smashed through $5,000. Why analysts think the rally may still have further to run appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.