Even after September’s record investment demand, gold is still underowned – State Street’s Doshi

(Kitco News, Thurs. Oct. 2nd, 2025) – Gold’s unprecedented rally found a new gear in September, marking the precious metal’s biggest quarterly gains in more than 40 years. While momentum could slow in the next couple of months, the market still has room to move higher, according to one market analyst.

In an interview with Kitco News, Aakash Doshi, Head of Gold Strategy at State Street Investment Management, said it is only a matter of time before gold prices push to $4,000 an ounce as investment demand has become a significant factor supporting prices at record highs.

The bullish outlook comes as gold prices currently trade at $3,867.10 an ounce, up 0.24% on the day. The yellow metal rallied nearly 17% in the last three months, its best quarter since the second quarter of 1982. Gold is also up 47% year-to-date, the strongest gains since 1979.

Even with this level of demand, Doshi noted that holdings in gold-backed ETFs remain well below the peak seen in 2020. He added that gold’s breakout rally in August created some FOMO (Fear of Missing Out) sentiment in the marketplace.

“Through most of this rally, gol d has been underowned by investors,” he said. “In January, GLD was still seeing outflows. So, from that standpoint, despite the growth, gold is still not an overowned asset.”

Doshi said he expects investment demand to remain steady through year-end; however, he added that demand should slow compared to September’s pace. He explained that gold has seen an extraordinary rally because investors are looking to hedge and protect themselves from extraordinary market conditions.

“High gold prices are warranted, given all the risks and structural factors. This price level is sustainable. But the daily volatility, the percentage changes we’ve seen, are not sustainable,” he said. “It’s a matter of when, not if, gold prices will reach $4,000 an ounce.”

Looking ahead, Doshi said the Federal Reserve’s new easing cycle is causing a bull-steepening curve in the U.S. bond market as short-term rates fall and long-term yields remain elevated.

He added that this environment should continue to weaken the U.S. dollar, creating new momentum for gold.

“The risks of a recession or stagflation are still low, but they are higher than they were 12 months or even six months ago,” he said.

The latest risk the U.S. economy faces is a government shutdown, as Congress has been unable to pass any new budget legislation. Doshi said it is too soon to determine how the U.S. government’s 22nd shutdown will impact gold and the economy.

“If it goes on beyond the month, then I think you’ll start to see negative growth consequences, which will be positive for gold. The longer this goes on, the risk of further downgrades from the rating agencies increases,” he said.

Although Doshi sees gold’s rise to $4,000 as inevitable, he is not expecting a straight line. He sees new support holding at $3,500 an ounce and expects dips will continue to be bought.

Posted by:

Jack Dempsey , President

401 Gold Consultants LLC

jdemp2003@gmail.com