An optimistic forecast for gold in 2026.. Will the markets witness a new historic leap?

Gold experienced a remarkable journey in 2025, reaching a peak of $4,381 per ounce in mid-October, but later retraced to settle around $4,000 by the end of November. This volatility sparked widespread discussions among analysts about whether the market is awaiting a new breakout toward $5,000 per ounce or if it will enter a stabilization phase in 2026.

This rally occurred amid a complex economic environment characterized by global fears of slowing growth in major economies and the gradual return of accommodative monetary policies, prompting investors to rebalance their portfolios toward safe assets. Additionally, concerns over sovereign debt and tensions in global supply chains have reinforced gold’s role as a primary protective tool in major investment portfolios.

Record-high Gold Demand

Data from the World Gold Council showed that total demand for the yellow metal (including investments) in Q2 2025 reached 1249 tons, down 3% year-over-year in volume, but value increased to $132 billion, up 45%, reflecting the high prices in the market.

The first quarter of 2025 was even more exciting, with demand reaching 1206 tons, the highest since 2016. The average price during that period rose to $2,860 per ounce, a 38% increase compared to the same period last year.

Exchange-traded gold funds (ETFs) saw unprecedented attractiveness, with assets under management reaching $472 billion and holdings rising to 3838 tons, a 6% increase from the previous quarter, approaching the all-time peak of 3929 tons.

North America led demand with 345.7 tons out of 618.8 tons globally since the start of the year to September 30, followed by Europe with 148.4 tons and Asia with 117.8 tons.

Central Banks Race to Boost Reserves

Central banks worldwide continued deepening their holdings of the precious metal, adding 244 tons in Q1 2025, a 24% increase over previous averages. This trend reflects a growing desire to diversify reserves away from reliance on the US dollar.

The report indicates that 44% of central banks globally now manage gold reserves, up from 37% in 2024.

China’s leadership is clear: the People’s Bank of China added more than 65 tons, continuing its purchases for the twenty-second consecutive month. Turkey also increased its reserves to over 600 tons. Experts expect central bank purchases to remain a strong demand driver until the end of 2026, especially from emerging countries seeking to protect their currencies.

Limited Supply… A Key Price Factor

Mine production in Q1 2025 reached 856 tons, a slight 1% annual increase. However, this limited rise is insufficient to bridge the growing gap between demand and supply.

What worsens the situation is that the amount of recycled gold decreased by 1% during the same period, as holders preferred to keep their holdings rather than sell, expecting continued price appreciation.

The mining industry faces increasing pressure from rising operational costs. The global extraction cost rose to around $1470 per ounce in mid-2025, the highest in a decade. This limits production expansion and makes any increase in supply costly and slow.

Monetary Policy… The Main Ally of the Rise

The US Federal Reserve cut interest rates in October 2025 by 25 basis points to a range of 3.75-4.00%, marking the second cut since December 2024. The official statement indicated the possibility of further cuts if labor market strength wanes or growth slows.

Market expectations price in another 25 basis point cut at the December 9-10, 2025 meeting, making it the third rate cut of the year. These rate reductions weaken the dollar overall and reduce real bond yields, boosting gold’s appeal as a store of value.

BlackRock analysts project that the Fed may target an interest rate of 3.4% by the end of 2026. If these scenarios materialize, they will lead to a decline in real yields, lowering the opportunity cost of holding gold as a non-yielding asset.

Geopolitical Tensions Support Hedging Demand

Trade conflicts between the US and China, along with Middle East tensions, pushed markets toward increased safe-haven investments. Tensions around the Taiwan Strait and fears over global energy supplies increased demand by 7% year-over-year, according to Reuters.

When crises escalated in July 2025, the spot price exceeded $3,400, then surged past $4,300 in October. This behavior proves that gold responds swiftly to crises, supporting the possibility of reaching record levels if a new shock occurs in 2026.

Dollar and Bonds… Inverse Relationship with Gold

Gold historically moves inversely to the US dollar and real bond yields. A weaker dollar increases the attractiveness of the metal for foreign investors, while higher yields reduce its appeal.

In 2025, the dollar index declined by about 7.64% from its peak at the start of the year to November 21, influenced by rate cut expectations. US 10-year bond yields fell from 4.6% to around 4.07% during the same period.

This double decline in the dollar index and yields helped support institutional demand for gold. Investors seek to rebalance their portfolios away from dollar assets.

Bank of America analysts believe that if this trend continues, it could support prices in 2026, especially with real yields stabilizing near 1.2% and continued dollar pressure, potentially placing the metal in a sustainable upward range.

Major Banks’ Outlook: Toward New Horizons

HSBC predicts that gold could surge to $5,000 per ounce in the first half of 2026, with an expected average of $4,600 for the year, compared to an average of $3,455 in 2025.

Bank of America also raised its forecast to $5,000, with an annual average of $4,400, but warned of a short-term correction due to profit-taking.

Goldman Sachs revised its outlook to $4,900 per ounce, citing strong inflows into gold ETFs and continued central bank buying.

J.P. Morgan expects gold to reach around $5,055 by mid-2026.

Based on these forecasts, the most common range among analysts extends between $4,800 and $5,000, with an average between $4,200 and $4,800.

Will a Correction Occur Before the Expected Peak?

Despite widespread optimism, HSBC issued a warning that the bullish momentum might weaken in the second half of 2026, with a correction toward $4,200 if investors start profit-taking, but excluding a decline below $3,800 unless a major economic shock occurs.

Goldman Sachs warned that sustained prices above $4,800 could test the market’s “price credibility,” i.e., the ability to maintain high levels amid weak industrial demand.

Meanwhile, J.P. Morgan and Deutsche Bank analysts agree that gold has entered new price levels that are difficult to break downward, thanks to a strategic shift in investor perception of it as a long-term asset.

Technical Analysis Indicates a Critical Waiting Phase

On the daily chart, gold closed on November 21, 2025, at $4,065.01, after reaching its high of $4,381.44 on October 20, 2025.

The price broke below the ascending channel on the daily timeframe but remains attached to the main upward trendline connecting higher lows around $4,050.

Strong support is seen at the $4,000 level, making this zone crucial. If the price closes below this support with a clear daily candle, it could target the 50% Fibonacci correction at around $3,800 before resuming upward.

On the bullish side, $4,200 represents the first strong resistance, followed by $4,400 and $4,680.

The RSI indicator remains at 50, indicating a neutral state with no clear bias.

The MACD line remains above zero, confirming the overall bullish trend.

Technical analysis suggests that gold will likely continue in a sideways upward channel between $4,000 and $4,220 in the near term, with the overall picture remaining positive as long as the price stays above the main trendline.

Ways to Benefit from Gold Movements

There are multiple options for investing in gold: physical purchase of bars, investment in ETFs, or buying shares of mining and trading companies.

Another alternative is trading CFDs, which allow direct speculation on price movements. However, caution is essential: these contracts carry significant risks along with potential profits.

Choosing a professional and secure broker is crucial for a successful experience, ensuring comprehensive support, an easy-to-use platform, dynamic charts, and an economic calendar that consolidates key upcoming events.

Conclusion: Gold’s Journey Toward 2026

The strong movement of gold in 2025 and the optimistic outlook reflect the deep economic challenges facing the world. As the cycle of monetary easing nears its end and global growth slows, the market may witness a struggle between profit-taking pressures and new institutional and central bank buying waves.

If real yields continue to decline and the dollar remains weak, gold is a strong candidate to record new historic highs approaching or surpassing $5,000. However, if inflation subsides and market confidence returns, the metal may enter a long-term stabilization phase, potentially preventing the achievement of ambitious targets.