Market News

BY Piero Cingari

After a historic 2025 that saw gold soar over 60% and break more than 50 record highs, investors are now turning their attention to whether the precious metal can sustain its upward trajectory into 2026.

Despite leading major asset classes in year-to-date performance, putting it on track for its best year since 1979, experts think gold may still have room to climb next year. Others warn that risks remain.

Unlike previous years when single events dominated gold’s trajectory, this year saw multiple drivers at play.

Sustained central bank buying, persistent geopolitical friction, elevated trade uncertainty, lower interest rates, and a weakening US dollar all combined to fuel demand for the metal as a safe-haven asset.

According to the World Gold Council’s latest report, geopolitical tensions contributed roughly 12 percentage points to year-to-date performance, while dollar weakness and slightly lower interest rates added another 10. Momentum and investor positioning accounted for nine points, with economic expansion contributing a further 10.

Central banks also continued to buy aggressively, keeping official-sector demand well above pre-pandemic norms.

Forecasts from the World Gold Council

Looking ahead, the Council expects many of the forces that powered gold’s extraordinary rally in 2025 to remain relevant in 2026.

However, the starting point is now fundamentally different. Unlike at the beginning of 2025, gold prices have already priced in what the WGC describes as the “macro consensus”. That's expectations of stable global growth, moderate US rate cuts, and a broadly steady dollar.

In this environment, the Council notes that gold appears fairly valued. Real interest rates are no longer falling significantly, opportunity costs are neutral, and the strong positive momentum seen in 2025 has begun to fade.

Investor risk appetite remains balanced, rather than tilting decisively toward caution or exuberance.

As a result, in its baseline scenario, the WGC sees gold trading within a narrow range in 2026, with performance likely limited to between –5% and +5%.

But the outlook is far from settled, as three alternative scenarios could shape a different path.

In a "shallow economic slip" — characterised by softer economic growth and additional Fed rate cuts — gold could rise by 5% to 15% as investors shift toward defensive assets, extending the gains of 2025.

In a deeper economic downturn, or "doom loop," gold could rally by 15% to 30%, fuelled by more aggressive monetary easing, declining Treasury yields, and strong safe-haven flows.