Gold could hit $4 000/oz by the end of next year as the Federal Reserve lowers interest rates to cushion the US economy, the dollar drops, and central banks keep expanding holdings, according to Fidelity International.

Multi-asset fund manager Ian Samson said the firm remained bullish on the precious metal, with some cross-asset portfolios recently increasing holdings as prices eased from an all-time high above $3 500/oz in April.

“The rationale for that was that we saw a clearer path to a more dovish Federal Reserve,” Samson said in an interview, adding that some funds had as much as doubled their 5% allocation over the past year. Another was that August is often a slightly weaker time for markets, so having more diversification “makes sense,” he said.

Gold is up by more than a quarter this year, as uncertainty around President Donald Trump’s aggressive attempts to reshape global trade, conflicts in the Middle East and Ukraine, and central-bank accumulation buttressed gains. Still, the metal has traded within a tight range over the past few months, with demand for havens cooling a little as some progress in US trade talks eased fears about worst-case scenarios for the global economy.

“Perhaps you’re going to avoid the doomsday scenarios that were painted earlier in the year, but ultimately we’re heading to a 15%-or-so tax on about 11% of the US economy — which is imports,” said Samson, referring to Trump’s tariffs. “That’s a pretty decent tax hike. You’d expect it to slow the economy.”

Fidelity’s bullish outlook for gold is similar to that from Goldman Sachs Group., which has made the case in recent quarters for an eventual rally to as much as $4 000/oz. Still, others are cautious, including Citigroup Inc., which forecasts weaker prices. Spot bullion was last at about $3 310.

Fed officials are due to gather this week to set policy. While no change is expected at this meeting, Chair Jerome Powell may face dissents from officials who want to provide support to a slowing labor market, potentially from Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman.

A US slowdown would likely see the dovish camp gain more influence in guiding policy, with the dollar tending to soften in environments of weaker growth, Samson said. In addition, Powell — whose term as Fed chair ends next May — will probably be replaced by someone “more amenable” to lower borrowing costs as Trump continues to lobby for interest-rate cuts, he said.

Non-yielding bullion typically benefits when the greenback softens and interest-rates ease.

Elsewhere, the world’s central banks are likely to go on buying gold, he added, while growing fiscal deficits — particularly in the US — would continue to reinforce the precious metal’s appeal as a hard asset.

“Sure, gold has come a long way, but if you look at when gold’s been in a bull market — like 2001 to 2011 — it annualized 20% per annum,” he said. “From 2021 to today, it’s also annualizing 20% a year. So it’s not necessarily, in the context of a bull run, massively overstretched.”