Gold forecasts 2026.. Are we expecting levels of $5000?

Gold Braces for Historic Fees… and Next Year Will Be the Decider

The precious metals market has experienced a wild movement this year, with gold surpassing the $4,300 per ounce threshold in mid-October before retreating toward levels of around $4,000 as November approached. This sharp volatility raised awkward questions about the nature of the upcoming movement: Will the bullish wave continue to actually reach $5,000? Or are we approaching a natural peak followed by corrections?

The answer lies in understanding the driving factors behind this rise: anticipated economic slowdown, gradual return of accommodative monetary policies, fears of inflated sovereign debts, and ongoing weakness of the US dollar. All these elements have combined to turn gold into the primary safe haven for global investors.

Why Has Demand for Gold Increased So Strongly?

Institutional Investment Leads the Movement

The World Gold Council data tells an exciting story: total demand for the yellow metal in Q2 2025 reached 1,249 tons, up 3% annually, but the monetary value jumped 45% to $132 billion. This difference between quantity and value reflects a sharp increase in prices.

Exchange-traded gold funds absorbed massive inflows during 2025, raising their managed assets to $472 billion, and holdings to 3,838 tons, very close to the all-time peak of 3,929 tons. About 28% of new investors in developed markets added gold to their portfolios for the first time, indicating a genuine strategic shift toward precious metals.

Central Banks Keep Buying Nonstop

The astonishing figure here: 44% of global central banks now manage gold reserves, up from 37% just a year ago. China alone added over 65 tons in the first half of 2025, marking its 22nd consecutive year of continuous purchases. Turkey’s reserves exceeded 600 tons.

These numbers are not random; they reflect a real desire among emerging economies to diversify their reserves away from the US dollar, which is gradually losing its appeal.

Supply and Demand Side… An Expanding Gap

Mining production has not kept pace with rampant demand. In Q1 2025, production was only 856 tons, up just 1% annually. The situation worsens: recycled gold decreased by 1%, as jewelry and gold piece holders chose to hold onto their assets expecting further increases.

Extraction costs have also risen significantly, with average costs reaching $1,470 per ounce (the highest in a decade), limiting attempts to ramp up production quickly. The gap between demand and supply widens day by day, supporting gold’s prospects to break through current price resistances.

The Federal Reserve and Monetary Policies… The Real Key

The US Federal Reserve cut interest rates by 25 basis points in October to 3.75-4.00%. Markets are pricing in an additional 25 basis point cut in December. BlackRock’s forecasts suggest the rate could reach 3.4% by the end of 2026 in a moderate scenario.

This successive decline in interest rates reduces the opportunity cost of investing in gold (an asset that yields no interest), boosting its attractiveness. The European Central Bank and Bank of Japan are following the same easing path, creating a global environment friendly to gold.

Geopolitical Variables and Exploding Debts

Trade tensions between the US and China, along with instability in the Middle East, pushed demand up by 7% annually (according to Reuters). The higher the risks, the more money flows into safe havens.

The International Monetary Fund pointed out that global public debt has exceeded 100% of GDP, raising real concerns about fiscal sustainability. Investors see gold as the only true protection against loss of purchasing power.

The Dollar and Yields… An Inverse Relationship Beneficial to Gold

The dollar index has declined about 7.64% since the start of 2025, while 10-year US bond yields fell from 4.6% to 4.07%. This double decline significantly enhances gold’s attractiveness.

Bank of America analysts believe that continuing this trend will support gold forecasts, especially with real yields stabilizing near 1.2%, which could place gold in a sustainable upward range.

Major Bank Outlooks: Where Is Gold Heading?

Optimistic Scenarios

HSBC expects gold to reach $5,000 in the first half of 2026, with an annual average of $4,600 (compared to an average of $3,455 in 2025).

Bank of America also raised its forecast to $5,000 as a potential peak, with an average of $4,400, but warned of short-term corrections when taking profits.

Goldman Sachs adjusted its forecast to $4,900, relying on continued inflows into gold ETFs.

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

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

Pessimistic Scenarios

HSBC warned that momentum might weaken in the second half of 2026, with correction possibilities toward $4,200, but excluding a drop below $3,800 unless a major economic shock occurs.

Goldman Sachs indicated that staying above $4,800 puts the market to a “price credibility test,” where gold must prove its ability to sustain these levels.

Technical Picture: What Does the Chart Say?

Gold closed November trading at $4,065, after touching a peak of $4,381 on October 20. It broke the short-term ascending channel but still clings to the main upward trend line around $4,050.

The $4,000 level is a critical support. A clear daily close below it could target $3,800 (Fibonacci level 50%) before resuming the ascent.

On the resistance side: $4,200 is the first strong barrier, followed by $4,400 and $4,680. The Relative Strength Index (RSI) remains at 50, indicating market neutrality. MACD suggests a continued upward trend.

Technical forecast: A sideways upward bias between $4,000 and $4,220 in the near term, with a positive outlook as long as the price stays above the main trend line.

Middle East in the Picture

Gulf countries and the region are witnessing a notable increase in gold demand. In Egypt, gold price forecasts suggest the ounce could reach around 522,580 Egyptian pounds (an increase of 158% over current prices).

In Saudi Arabia, translating global forecasts ($5,000) using a fixed exchange rate, prices could approach 18,750 to 19,000 SAR per ounce.

In the UAE, the same forecast might give an estimate around 18,375 to 19,000 AED.

But it’s important to remember that these forecasts assume stable exchange rates and continued global demand without sharp economic shocks.

Summary: Possible Scenarios for 2026

If real yields continue to decline and the dollar remains weak, gold is a strong candidate to record new historic peaks possibly touching $5,000 or more.

Conversely, if inflation recedes and confidence returns to financial markets, gold may enter a long-term stabilization phase preventing reaching ambitious levels.

What is certain: central banks will continue buying, new investors may not withdraw quickly, and geopolitical factors will not disappear. This mix favors upward movement, but with potential deep corrections before reaching final targets.

The only certainty in 2026: gold will remain at the heart of global hedging strategies, regardless of the price levels it reaches.