Expert Predicts Gold Prices Could Surpass $3,800 per Ounce

Economic analyst Osama Zarei stated that gold has shown clear bullish technical signals this week, following a period of sideways movement. He expects prices to exceed $3,500 in the medium term, supported by a narrowing resistance zone around $3,430, which represents a key technical barrier. A breakout above this level could pave the way for further gains toward $3,700–$3,800 per ounce.

Zarei noted that markets are currently focused on the upcoming Federal Open Market Committee (FOMC) meeting scheduled for July 30, as the results and any forward guidance on interest rate cuts are expected to have a significant impact on gold’s trajectory.

He added that expectations of lower interest rates typically support gold prices, as the metal becomes more attractive compared to fixed-income assets that lose appeal in low-rate environments.

Zarei explained that short-term forecasts suggest gold could rise to test the $3,430 level. The price is expected to find key support at $3,350 and $3,335, which may serve as launch points for a potential rebound toward $3,400. However, if gold breaks below $3,300, the market may shift to a more cautious and uncertain stance.

On a longer-term horizon, Zarei reaffirmed the strong possibility of gold rising to $3,700, with a potential to reach $3,800 or even $4,000. He expects these levels to materialize during the September to October period, reflecting confidence in the continuation of bullish macroeconomic drivers.

According to the latest Commitments of Traders (COT) report, there have been no major shifts in large trader positions. The share of managed money long positions fell slightly to 45.4% of open interest, while short positions also declined to 16.3%. This indicates a balanced investor sentiment, with no abrupt moves toward buying or selling.

At the same time, gold futures continue to break out of their previous sideways pattern — a technical sign of growing momentum — supported by an accumulation of long positions.

A report by Apollo Global Management sheds light on a silent crisis tied to the resumption of U.S. federal student loan payments. Nearly 45 million borrowers are now facing repayment pressures, with a default rate of 24%, threatening to downgrade the credit scores of over 11 million Americans. This could severely restrict their ability to finance essential purchases like vehicles and home appliances, weakening consumer spending — the main driver of the U.S. economy.

This situation draws alarming comparisons to the 2008 subprime mortgage crisis, which led to a systemic collapse with a delinquency rate of less than 10%. Today, student loan delinquencies have surpassed 24%, raising questions about why the market hasn't yet collapsed.

Student loans represent roughly 9% of total household liabilities, and disproportionately affect the 30–59 age group, which is vital to sustaining consumption. As credit conditions worsen, the economy faces a heightened risk of demand-side stagnation.

It's worth noting that the subprime crisis erupted at just 8–10% delinquency, while the current 24% in student loans is staggering. The main reason the market hasn’t collapsed is due to the gradual absorption of losses by the government. The student loan sector, along with the silent support for higher education as an industry, is effectively in decline.

Policy Implications and Gold’s Strategic Advantage

Given these dynamics, the Federal Reserve may be compelled to implement interest rate cuts in the coming months, possibly alongside a new round of quantitative easing (QE). These measures could be necessary to avoid broader economic deterioration. In such scenarios, gold stands to benefit the most, being a traditional safe haven in times of financial uncertainty.

A comprehensive analysis of gold’s behavior in relation to broader macroeconomic forces reveals a strong connection between monetary policy, credit conditions, and financial asset performance. Gold continues to show resilience and upward strength, bolstered by expectations of rate cuts and potential QE.

Meanwhile, the student loan crisis casts a shadow over the U.S. economic landscape. The government’s capacity to absorb these credit shocks will be crucial in determining the near-term path of the economy.

In this environment of volatility and structural stress, gold remains an attractive investment instrument for those seeking capital protection and long-term stability.