Is gold expected to reach record levels in 2026? Price forecasts and influencing factors

Current Market Outlook

The precious metal experienced a notable upward movement during 2025, reaching a high of $4381 per ounce in October before undergoing a corrective pullback to close near $4065 in November 2025. This volatility sparked intense discussions among analysts regarding the expected price trajectory in the coming year and whether the yellow metal can break through the $5000 barrier.

The average gold price in 2025 was approximately $3455 per ounce, driven by extraordinary investment demand and a significant increase in global central bank purchases. The demand for exchange-traded gold funds (ETFs) alone reached $472 billion by the end of Q3, marking a 6% increase from the previous period.

Key Price Drivers

Rising Investment Demand

Total gold demand in Q2 2025 was about 1249 tons, up 3% annually, with the value jumping by 45% to reach $132 billion. Around 28% of new investors in developed markets invested in gold for the first time last year, benefiting from inflationary pressures and general economic anxiety.

Role of Global Central Banks

The percentage of central banks holding gold reserves increased from 37% in 2024 to 44% currently. China alone added over 65 tons in the first half of 2025, continuing a 22-month consecutive streak. This trend reflects a strategic desire to diversify away from the US dollar and reduce exposure to volatile cryptocurrencies.

Supply-Demand Imbalance

Record mine production reached 856 tons in Q1 2025, a slight increase of only 1% annually, insufficient to meet rising demand. Recycled gold decreased by 1%, as investors prefer to hold their holdings expecting further gains. This supply shortfall exerts an upward pressure on prices.

Monetary Policies and Interest Rates

The US Federal Reserve cut interest rates by 25 basis points in October 2025, bringing the range to 3.75-4.00%. Markets are pricing in another rate cut by December 2025. “BlackRock” forecasts suggest that interest rates could fall to 3.4% by the end of 2026, reducing the opportunity cost of holding non-yielding assets like gold.

Geopolitical and Economic Pressures

Chinese-American trade tensions and Middle East conflicts increased safe-haven demand by 7% annually. Global debt levels (exceeded 100% of GDP), and uncertainty about financial stability prompted 42% of major hedge funds to strengthen their positions in the yellow metal.

Price Forecasts for 2026

Major investment banks do not agree on a precise figure, but forecasts generally fall within a specific range:

HSBC expects gold to reach $5000 in the first half of 2026, with an annual average of $4600. The bank bases this on ongoing geopolitical risks and new investment demand.

Bank of America raised its target to $5000 as a potential peak, with an average of $4400 for the year, but warned of possible short-term corrections when taking profits.

Goldman Sachs adjusted its forecast to $4900 per ounce, supported by strong inflows into gold ETFs and continued central bank purchases.

J.P. Morgan anticipates prices reaching around $5055 by mid-2026.

The most common range among analysts is between $4800 and $5000, with an annual average between $4200 and $4800.

Alternative Scenarios and Risks

Correction Scenario

HSBC warned of a possible downward correction targeting $4200 in the second half of 2026 if investors start profit-taking, but ruled out a drop below $3800 unless a major economic shock occurs.

Price Credibility Test

Goldman Sachs indicated that sustained prices above $4800 could challenge the market due to weak underlying industrial demand.

Strong Technological Support

J.P. Morgan and Deutsche Bank analysts agree that the yellow metal has entered a new price zone that is difficult to break downward due to a deep strategic shift in investor perception of it as a long-term asset.

Regional Gold Price Projections

In Egypt, price forecasts suggest the possibility of reaching approximately 522,580 EGP per ounce by 2026, representing a 158% increase over current levels.

In Saudi Arabia, if the optimistic scenario of $5000 per ounce materializes, it could equate to roughly 18,750 to 19,000 SAR at a fixed exchange rate.

In the UAE, similar estimates suggest a range of 18,375 to 19,000 AED per ounce, assuming exchange rates remain stable and global demand continues.

Short-Term Technical Analysis

On the daily chart, gold shows strong support at $4000. A clear daily close below this level could target $3800 (50% Fibonacci retracement level).

On the upside, $4200 represents the first resistance, and breaking above it opens the way toward $4400 and then $4680.

The Relative Strength Index (RSI) remains around 50, indicating a neutral market with no clear bias. The MACD stays above zero, confirming the overall bullish trend.

The technical outlook favors continued sideways trading within a mildly upward sloping range between $4000 and $4220 in the near term, maintaining a positive outlook as long as the price stays above the main trendline.

Summary

Gold prices in 2026 will depend on a delicate balance of multiple factors. Continued relative weakness of the dollar, declining real yields, and ongoing central bank buying all support the targeted rise toward $5000. However, the likelihood of inflation materializing and market confidence returning could prevent reaching these ambitious levels, potentially confining prices within a lower range.