Gold is approaching $5000.. Will 2026 be the year of a new peak?

Gold experienced an unprecedented upward surge in 2025, breaking the $4,300 per ounce barrier in mid-October before retreating near $4,000 as November began, sparking widespread debate about what 2026 holds for the precious metal. Will the crazy rally continue or are we on the verge of a correction phase? The key question: Can gold really reach $5,000?

Investment demand has surged to record levels, central bank holdings have increased, and economic and geopolitical uncertainties persist—all prompting investors to reconsider their portfolios and move toward safe-haven assets. Gold is no longer just a commodity; it has become a safe haven in a world full of risks.

Performance Analysis… From $3455 to a Peak of $4381

The average gold price in 2025 reached around $3455 per ounce, but the real story was the accelerating rise in recent months. Total demand for the metal in Q2 2025 reached 1249 tons, up 3% annually, while value jumped to $132 billion, a 45% increase.

Gold ETFs recorded unprecedented massive inflows, with assets under management reaching $472 billion, and holdings increasing to 3838 tons, approaching a historic peak of 3929 tons. This significant investment rush reflects historic confidence in the metal as a hedge against volatility.

North America led the buyers with 345.7 tons, followed by Europe (148.4 tons), then Asia (117.8 tons). In the US alone, investment fund inflows of $21 billion offset declines in consumer and jewelry demand.

Central Banks’ Role… The Largest Buyer

Central banks worldwide added 244 tons of gold in Q1 2025, a 24% increase over the previous annual average. More importantly, 44% of global central banks now manage gold reserves, up from just 37% in 2024.

China alone added over 65 tons (for the 22nd consecutive month), while Turkey boosted its reserves to over 600 tons. This trend is no coincidence but a conscious strategy to diversify assets away from the US dollar and protect local currencies from exchange rate fluctuations.

The World Gold Council predicts that central bank purchases will remain the main driver of demand through the end of 2026, especially in emerging markets seeking to strengthen their currencies.

The Dark Side… Alarming Supply Shortage

Total mine production in Q1 2025 reached 856 tons, a slight increase of less than 1% annually. The problem is that this production is far from bridging the gap between rising demand and limited supply.

Even worse, recycled gold decreased by 1%, as owners of gold coins prefer to hold onto their assets amid expectations of continued price increases. This supply shortage deepens a real market gap.

Global extraction costs have risen to around $1470 per ounce (highest in a decade), squeezing miners’ profit margins and limiting production expansion. Even when prices soared wildly, supply did not respond proportionally.

Monetary Policy… A Complex Path

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 accompanying statement indicated possible further cuts if growth or the labor market weakens.

Market expectations price in another 25 basis point cut (during the December 2025 meeting), making it the third cut of the year. This easing path enhances gold’s appeal as a non-yielding asset.

Other central banks are taking different approaches: the European Central Bank maintained a tightening stance, while the Bank of Japan continued easing. This divergence created a volatile environment, boosting gold’s role as a global hedge.

Global Debt and Inflation… Pressure Factors

Global public debt exceeded 100% of GDP, raising serious concerns about fiscal sustainability. Investors sought refuge to protect against loss of purchasing power, and gold was the obvious choice.

Weak dollar and slowing growth in advanced economies supported commodity prices, led by gold. About 42% of major hedge funds increased their gold positions in Q3 2025 as a long-term financial risk hedge.

Geopolitics Fuel Demand

Trade conflicts between the US and China, along with tensions in the Middle East, drove investors toward gold. Reports indicate that geopolitical uncertainty in 2025 increased demand by 7% annually.

Tensions in the Taiwan Strait and fears over energy supplies pushed prices above $3400 in July, then jumped further to $4300 in October. Gold moves quickly with crises, making it likely that any new shock in 2026 could push prices to record highs.

The Dollar and Bonds… An Inverse Relationship

Gold historically moves inversely to the US dollar and real bond yields. In 2025, the dollar index declined about 7.64% from its early-year peak, influenced by rate cut expectations.

US 10-year bond yields fell from 4.6% in Q1 to around 4.07% by the end of November. This combination of a weakening dollar and low yields strongly supported institutional demand for gold.

Bank of America analysts expect this trend to support higher prices in 2026, especially with real yields stabilizing near 1.2% and continued dollar pressure.

2026 Outlook… The Agreed Range

HSBC forecasts gold rising to $5000 in the first half of 2026, with an expected average of $4600 for the full year.

Bank of America raised its forecast to $5000 as a potential peak, with an average of $4400, but warned of a short-term correction if investors take profits.

Goldman Sachs adjusted its forecast to $4900, citing strong inflows into ETFs and ongoing central bank buying.

J.P. Morgan expects gold to reach $5055 by mid-2026.

The most common range among analysts is between $4800 and $5000 as a potential peak, with an average between $4200 and $4800.

The Possible Correction… The Other Side of the Coin

Not all forecasts are positive. HSBC warned that the upward momentum could weaken in the second half of 2026, with a correction possibly down to around $4200 if investors start taking profits. However, it ruled out a drop below $3800 unless a major economic shock occurs.

Goldman Sachs indicated that sustained prices above $4800 could lead to a “price credibility test,” where maintaining such levels becomes difficult amid weak industrial demand.

But J.P. Morgan and Deutsche Bank agree that gold has entered a new price zone that is hard to break downward, thanks to a strategic shift in investor perception of it as a long-term asset rather than just a speculative tool.

What Should Investors Do?

There are several ways to benefit from gold price movements:

Traditional options:

• Buying physical gold bars and coins
• Investing in ETFs
• Purchasing mining and trading stocks

Advanced option: Trading CFDs, which allow direct speculation on price movements. This option offers leverage and quick execution but also carries higher risks.

Choosing any of these methods depends on your investment profile, risk tolerance, and investment horizon.

Technical Outlook… Where Is Gold Heading?

Closing on November 21, 2025, at $4065.01. The price broke the upward channel but held the main rising trend line.

Support and resistance levels:

• Strong support at $4000
• If it breaks below $4000, the next target is $3800 (50% Fibonacci retracement)
• First resistance at $4200
• Then $4400, followed by $4680

Momentum indicators:

• RSI is at neutral (50), indicating a balanced state
• MACD remains above zero, confirming an upward trend

Technical forecast: Sideways trading within an upward trend between $4000 and $4220 soon, with a positive outlook as long as the price stays above the main trend line.

Final Summary

2026 could be a pivotal year for gold. If real yields continue to decline and the dollar remains weak, the metal is truly poised to hit historic highs at $5000 or beyond.

Conversely, if inflation eases and market confidence returns, gold may enter a long-term stabilization phase without reaching those ambitious levels.

What is clear, however, is that gold is no longer a marginal asset in investment portfolios. It has become a key player in risk protection and hedging against economic and geopolitical uncertainty.