Australia and New Zealand Banking Group expects gold prices to reach $5,800 per ounce in the second quarter.

Gold prices seem to be consolidating around the $5,000 mark, but that doesn’t mean the precious metal will stay at this level for long. An international bank has raised its gold price target for the second quarter.

ANZ Commodity Analysts stated in their latest report that they expect gold to reach $5,800 per ounce in the second quarter, significantly up from their previous target of $5,400.

“Although recent volatility has raised questions about whether gold has peaked, we believe this rally is not yet mature enough to reverse,” the analysts said.

Gold fell sharply from the near $5,600 all-time high set last month, causing some investors to worry that prices might experience a sharp decline similar to historical cycles like the peaks in 1980 or 2011.

However, ANZ pointed out that the current market environment is very different. Gold is now strongly supported as markets anticipate at least two rate cuts by the Federal Reserve this year. Easing inflation pressures have also led markets to price in the possibility of a third rate cut before December.

“We expect two 25 basis point rate cuts, in March and June. This will keep real interest rates downward, supporting gold inflows. Geopolitical and economic uncertainties may persist, with Trump continuing to use tariffs as a threat. Market focus is gradually shifting to the potential impact of tariffs, which has not yet fully reflected in economic and inflation data. Concerns about the Federal Reserve’s credibility remain, which will reinforce investor preference for tangible assets like gold,” the analysts said.

The Australian bank also stated that, aside from U.S. monetary policy, gold remains the ultimate hedge against increasing global financial market uncertainties.

The analysts added that as U.S. Treasuries lose their shine, gold remains an attractive defensive asset. This is not just a U.S. issue; rising global debt levels are also diminishing the appeal of bonds worldwide, including Japanese government bonds.

“The global financial system is undergoing a structural shift. U.S. Treasuries, once considered the world’s largest risk-free assets and the basis for interest-bearing and tradable instruments, now face trust issues. Rising debt levels, concerns over Fed independence, and increasing sanctions risks are fundamentally changing their status. As a result, investors demand higher premiums for long-term U.S. debt, as seen in the widening yield spreads between short- and long-term bonds,” the analysts explained.

“Gold acts as a transitional asset, providing stability and diversification when traditional anchors are under pressure. This is why strategic allocation to gold remains relevant—at least until geopolitical stability, resolution of U.S. structural fiscal issues, and restoration of Fed credibility are achieved. These conditions are unlikely to be met in the short term. In this context, gold’s role as a store of value and hedge is crucial.”

Regarding different segments of the gold market, ANZ said that while they expect central bank demand to remain strong through 2026, broader investment demand will be the main driver this year.

The analysts noted that even at higher prices, there is significant room for growth in gold-backed ETFs.

“We expect continued inflows into gold ETFs, with total holdings possibly exceeding 4,800 tons this year. While Western markets continue to support ETF demand, emerging markets like China and India are expected to see substantial growth. Their share of global ETF holdings could expand further from the current 10%,” they said.

“The upside risk to our outlook is that if geopolitical or political risks worsen, funds may shift from stocks and bonds into gold allocations,” they added. “Gold ETF assets under management account for less than 3% of total equity and bond holdings. This means even small reallocations could disproportionately boost gold prices.”

ANZ also remains optimistic about silver prospects. However, analysts noted that due to silver’s higher volatility, its performance this year is unlikely to surpass gold.

“Silver’s performance will still be anchored to gold prices; strong investment demand leaves room for upward movement,” the analysts said. “That said, as industrial demand begins to react to higher prices, investors are becoming more cautious, and the trend of silver outperforming gold may be coming to an end. Silver’s trading range could become wider.”