The gold market remains firmly supported above $3,300, and ING says it’s only a matter of time before prices break out of consolidation and retest record highs.

In her monthly gold report, Ewa Manthey, commodities strategist at ING, raised her forecasts as U.S. labor market momentum fades and inflation pressures persist. She now sees gold averaging $3,400 an ounce in the third quarter and $3,450 in the fourth, up from $3,200 for both periods in her earlier outlook.

Manthey expects prices to climb above $3,500 an ounce in the first quarter of next year more than 9% higher than her previous estimate with an average of $3,512 in 2026, up from $3,175. The upgrade comes as ING projects aggressive Federal Reserve rate cuts in the second half of 2025.

“With US rate cuts bets intensifying, gold could be poised for another fresh record high. Our US economist now expects three cuts for the rest of this year and another two in early 2026, which is more aggressive than markets are pricing,” she said. “Lower interest rates typically boost gold, which doesn’t pay interest, compared to other assets.”

According to the CME FedWatch Tool, markets see a 90% chance of a Fed rate cut next month and a 50/50 chance of three cuts by year-end. Manthey said concerns over the Fed’s independence could further support safe-haven demand.

“Governor Adriana Kugler's resignation… could give President Trump the opportunity to appoint someone more agreeing with his rate-cutting agenda. Of course, he's no fan of Chair Powell, and his term ends next May. It's all adding to fears about the Fed's independence, all the time boosting the gold price,” she said.

Last week, Trump named Stephen Miran, Chair of the Council of Economic Advisors, to replace Kugler.

Manthey also pointed to strong central bank buying and growing investor interest. “We believe central banks will continue to add gold to their reserves given the still-uncertain economic environment and the drive to diversify away from the US dollar,” she said.

She noted investment demand for gold-backed ETFs in the first half of the year grew at its fastest pace since early 2020, though holdings remain about 300 tonnes below record highs set five years ago.

“Central banks are still buying, Trump’s trade war is still going on, geopolitical risks remain elevated, and ETF holdings continue to expand—all underpinning gold prices at the current levels. The Fed cutting rates could be the catalyst that has been missing to reignite that record-breaking rally once again,” she said.