Gold Outlook 2026: Will it decline or hit new record highs?

Gold experienced an unprecedented rise in recent years during 2025, with prices surpassing the $4,300 per ounce barrier in mid-October 2025, before retreating toward levels around $4,000 in November, raising serious questions about whether the gold price in 2026 will continue toward $5,000 or will decline again.

This sharp increase came amid growing fears of a slowdown in global economic growth and expectations of a gradual return to expansionary monetary policies, prompting investors to seek safe havens, making gold the primary choice as a strategic hedge against economic and political uncertainty.

Factors Supporting the Rise in Gold Prices in 2026

1- Rising Investment Demand

The World Gold Council estimated that total demand for the metal in Q2 2025 reached 1,249 tons, an increase of 3% annually, with a value of $132 billion, up 45%.

Meanwhile, exchange-traded gold funds attracted massive inflows, bringing assets under management to $472 billion, with holdings of 3,838 tons, approaching a historic peak estimated at 3,929 tons. This indicator enhances the likelihood of continued growth rather than a collapse in the coming year.

North America accounted for more than half of global demand, with 618.8 tons from the start of the year until September, followed by Europe and Asia with a clear margin.

2- Continued Central Bank Purchases

Central banks continued to strengthen their gold reserves significantly, adding 244 tons during Q1 2025, exceeding the five-year quarterly average by 24%.

The number of central banks managing gold reserves increased to 44% of all banks worldwide, up from 37% in 2024, reflecting a strategic trend toward diversification away from the dollar.

China, Turkey, and India led the buyers, with the People’s Bank of China alone adding more than 65 tons for the twenty-second consecutive month. The council expects these purchases to remain a key driver of demand through the end of 2026.

3- The Gap Between Supply and Demand

Mine production reached a record 856 tons in Q1 2025, but this slow increase does not cover the rising demand.

Recycled gold quantities decreased by 1%, as owners prefer to hold onto their assets in anticipation of further increases, deepening the supply-demand gap.

Global extraction costs rose to $1,470 per ounce in mid-2025, the highest level in a decade, limiting future expansion of production.

4- US and Global Monetary Policies

The Federal Reserve cut interest rates in October 2025 by 25 basis points, bringing the range to 3.75-4.00%, with signals of further possible cuts.

Market expectations indicate a potential additional 25 basis point cut in December 2025 and 2026, which could lead the interest rate to 3.4% by the end of 2026.

Real yields on 10-year bonds decreased from 4.6% to 4.07%, reducing the opportunity cost of holding interest-free gold.

Other major central banks, especially the European Central Bank and Bank of Japan, are pursuing easing policies that support the metal’s appeal as a safe haven.

5- Inflation and Financial Pressures

Global public debt has exceeded 100% of GDP, raising concerns about the sustainability of fiscal policies.

Approximately 42% of major hedge funds increased their gold holdings during Q3 2025 as a hedge against long-term financial risks.

6- Geopolitical Tensions

Trade conflicts and regional tensions increased demand for gold as a safe haven by 7% annually.

When concerns about Taiwan and energy supplies escalated, spot prices jumped to levels exceeding $3,400 in July 2025.

As uncertainty persists, gold continued its ascent, surpassing $4,300 in mid-October.

7- Weakening US Dollar

The US dollar index declined by 7.64% from its peak at the start of the current year, influenced by expectations of rate cuts and slowing growth.

This weakness enhances gold’s attractiveness to foreign investors and supports global demand.

Gold Price Forecasts for 2026 from Major Banks

HSBC Bank: expects a surge to $5,000 per ounce in the first half of 2026, with an expected annual average of $4,600.

Bank of America: raised its forecast to $5,000 as a potential peak in 2026, with an expected average of $4,400, but noted a possibility of a short-term correction for profit-taking.

Goldman Sachs: adjusted its 2026 forecast to $4,900 per ounce, citing strong inflows into gold ETFs and continued central bank purchases.

J.P. Morgan: predicts gold reaching approximately $5,055 by mid-2026.

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

Local Market Gold Price Expectations

Egypt: According to specialized forecasts, the gold price may reach approximately 522,580 Egyptian pounds per ounce in 2026, representing a 158.46% increase.

Saudi Arabia: If the scenario of $5,000 per ounce materializes, this could translate to about 18,750 to 19,000 SAR at a fixed exchange rate of (3.75 to 3.80 SAR per dollar).

UAE: Under the same scenario, the ounce price could reach approximately 18,375 to 19,000 AED.

These forecasts assume stable exchange rates and continued global demand without major economic fluctuations.

Risks of Correction and Potential Decline

Despite optimism, HSBC warned that upward momentum might weaken in the second half of 2026, with potential corrections toward $4,200 per ounce if investors start profit-taking.

The bank ruled out a decline below $3,800 unless a real economic shock occurs.

Goldman Sachs cautioned that sustained prices above $4,800 could test the “price credibility” of the market, especially with weak industrial demand.

J.P. Morgan and Deutsche Bank analysts agreed that gold has entered a new price zone that is difficult to break downward, thanks to strategic shifts in investor perception of it as a long-term asset.

Technical Analysis of Gold Price at the Beginning of 2026

Gold closed trading on November 21, 2025, at $4,065.01 per ounce, after reaching a peak of $4,381.44 on October 20, 2025.

The price broke below the ascending channel on the daily chart but still holds the main short-term upward trendline, connecting lows around $4,050.

Strong support exists at the $4,000 level, a critical zone to determine whether the correction will continue downward. A clear close below it could target $3,800 (50% Fibonacci retracement).

First strong resistance levels are at $4,200, followed by $4,400 and $4,680.

The RSI indicator remains at 50, indicating a neutral market with no clear bias.

The MACD remains above zero, confirming that the overall trend is still bullish.

It is likely that trading will continue within a sideways upward-sloping range between $4,000 and $4,220 in the near term, with the positive outlook maintained as long as the price stays above the main trendline.

Summary

Gold price forecasts in 2026 reflect a struggle between profit-taking and new buying waves from institutions and central banks. With declining real yields and a weakening dollar, the metal is poised to reach record levels approaching $5,000.

However, if inflationary pressures ease and confidence returns to financial markets, gold may enter a long-term stabilization phase, which could prevent reaching the higher targets. Continuous monitoring of geopolitical and global monetary factors will be crucial in determining the price trajectory over the next year.