Will the price of gold decrease in 2026? The path to $5000 or the inevitable correction

Gold in 2025 experienced an unprecedented journey, starting from an average of $3,455 per ounce to touch a peak of $4,381 in October before retreating near $4,065 as the year ended. This volatile movement sparked intense debate among analysts: will the rally continue in 2026 to reach $5,000, or is a correction waiting in the markets?

Unprecedented Investment Demand Drives Higher

The first answer comes from demand, which has continued to rise. The second quarter of 2025 recorded a total demand of 1,249 tons, a 3% annual increase, but the value surged by 45% to reach $132 billion. This huge increase in value amid a modest rise in volume reflects an important truth: investors want gold at any price.

Gold ETFs attracted massive inflows totaling $472 billion in assets under management, with holdings reaching 3,838 tons, very close to the all-time peak. In fact, Bloomberg data shows that 28% of new investors in developed markets added gold to their portfolios for the first time, and importantly, they maintained their positions even during correction periods, indicating a fundamental shift in their perception of the yellow metal.

Central Banks Extend the Path Toward $5,000

On the institutional side, central banks continue to buy. They added 244 tons in the first quarter alone, a 24% increase over the previous quarterly average. Data shows that 44% of central banks now hold gold reserves, up from 37% a year earlier.

China alone added 65 tons in one month, extending its streak of increases to 22 consecutive months. Turkey’s reserves reached 600 tons. These organized and ongoing moves by the world’s largest emerging economies suggest that government support will persist through at least 2026.

Supply Constraints Forcibly Push Prices Up

Mine supply has become the weak link. The first quarter saw only 856 tons, a 1% annual increase, a slight rise that does not match the demand surge. Even worse, recycled gold decreased by 1%, as owners hold onto their assets expecting higher prices.

Production costs are also rising rapidly. The global average extraction cost reached $1,470 per ounce, the highest in a decade, making any expansion costly. This means the gap between demand and supply will remain wide in 2026.

Monetary Policies Moving Toward Easing

The US Federal Reserve cut interest rates by 25 basis points in October, bringing the rate to 3.75-4.00%, the second cut since December 2024. Traders on trading platforms are pricing in an additional 25 basis point cut in December 2025, with possibly more cuts in 2026.

BlackRock reports suggest that the Fed could reach 3.4% by the end of 2026 under moderate scenarios. When nominal interest rates fall, real bond yields also decline, reducing the opportunity cost of investing in a non-yielding asset like gold.

The European Central Bank and Bank of Japan are heading in a similar direction, maintaining accommodative or expansionary policies. This global trend toward easing monetary restrictions supports demand for gold as a safe haven.

Debt and Inflation Deepen the Economic Crisis

Global public debt has surpassed 100% of GDP, raising deep concerns about fiscal sustainability. IMF and World Bank warn of upcoming financial pressures. This drives investors to seek safe havens, and gold offers protection against loss of purchasing power.

Meanwhile, the slowdown in fiscal tightening programs in major economies has increased pressure on bond markets. Bloomberg Economics data shows that 42% of major hedge funds increased their gold holdings during the third quarter of 2025 alone.

Geopolitical Tensions Boost Prices

Trade conflicts between Washington and Beijing, along with Middle East tensions, increased demand for gold by 7% annually due to geopolitical hedging. When fears about the Taiwan Strait escalated mid-year, prices jumped to $3,400. With ongoing uncertainty, they exceeded $4,300 in October.

This historical pattern suggests that any new geopolitical shock in 2026 could push prices to even higher record levels.

Weak Dollar and Low Yields Support Upside

Gold moves inversely to the dollar and real bond yields. In 2025, the dollar index fell by 7.64% from its peak, while 10-year bond yields declined from 4.6% to 4.07%.

This double decline encouraged investors to reallocate their portfolios away from dollar assets. Bank of America analysts see that continuing this trend could support expectations for 2026, especially with real yields remaining near 1.2%.

What Do Experts Expect for Gold in 2026?

HSBC Bank projected gold reaching $5,000 in the first half of 2026, with an average of $4,600 for the full year. Bank of America raised its forecast to $5,000 as a peak, but with caution about a short-term correction due to profit-taking.

Goldman Sachs adjusted its forecast to $4,900, based on strong ETF inflows and ongoing central bank purchases. J.P. Morgan expects $5,055 by mid-2026.

The most common range among experts is between $4,800 and $5,000 as a peak, with an average between $4,200 and $4,800.

Risks: Correction Could Reach $4,200

The picture is not without warnings. HSBC itself warned of losing momentum in the second half of 2026, with potential correction toward $4,200 if investors start profit-taking. However, a drop below $3,800 is unlikely unless a severe economic shock occurs.

Goldman Sachs pointed out that prices remaining above $4,800 would put the market to a “credibility test,” especially with weak industrial demand.

But J.P. Morgan and Deutsche Bank analysts agree that gold has entered a new price range that is difficult to break downward, as investor perception has shifted from a short-term speculative tool to a genuine long-term investment.

Technical Analysis: Short-term Neutral Before a New Wave

On the daily chart, gold closed on November 21 at $4,065 after breaking the upward channel but holding the main trendline. The price finds strong support at $4,000.

The RSI indicator is steady at 50, reflecting complete neutrality with no clear bias. The MACD remains above zero, confirming that the overall trend is still bullish. In the near term, gold is expected to trade within a sideways upward-sloping range between $4,000 and $4,220.

Strong resistance is at $4,200, followed by $4,400 and $4,680. Breaking these levels would open the way toward the $5,000 target.

Summary: More Likely to Rise Than Fall

Despite risks, evidence suggests that 2026 will see a serious attempt to reach $5,000. Central banks continue buying, retail investors have discovered gold, supply is limited, costs are high, and global monetary policies remain accommodative.

However, caution remains necessary. Profit-taking and short-term corrections are expected, but they will not break the long-term trend. Gold is no longer just a commodity; it has become a genuine strategic investment.