Gold Price Outlook 2026.. Will it approach $5000 or decline?

Gold experienced an exceptional journey in 2025, as it broke the $4300 per ounce level in mid-October before undergoing a corrective pullback toward $4000 in November. These movements sparked intense discussions about the gold’s trajectory in 2026 and when the price of gold will decline in Saudi Arabia and globally under various expected economic scenarios.

Multiple factors drove this sharp rise, including slowing global economic growth, gradual interest rate reductions, and increasing fears of sovereign debt, prompting investors to seek gold as a safe haven in an unstable economic environment. However, the key question on traders’ and analysts’ minds is: Will this rise continue to $5000 in 2026, or is a downward correction coming?

Fundamental Factors Influencing Gold Movement in 2026

Global demand remains strong

Global demand for gold hit record levels, with total demand in Q2 2025 reaching 1249 tons, up 3% annually, valued at $132 billion. Meanwhile, gold ETFs attracted massive inflows, raising their managed assets to $472 billion with holdings of 3838 tons.

North America led the consumption list with 345.7 tons, followed by Europe with 148.4 tons, then Asia with 117.8 tons. Data also showed that about 28% of new investors added gold to their portfolios for the first time last year, reflecting an expanding investor base rather than mere speculation.

Central banks strongly bolster their reserves

Central banks worldwide continued strong purchasing, adding 244 tons in Q1 2025, a 24% increase over the previous quarterly average. Data indicates that 44% of global central banks now hold gold reserves, up from 37% in 2024, reflecting a clear strategy shift toward diversification away from the dollar.

China, India, and Turkey were the top buyers, with the People’s Bank of China alone adding over 65 tons for the 22nd consecutive month. Analysts expect central institutional purchases to remain the strongest demand driver through the end of 2026, especially in emerging markets.

Limited supply and high costs

Despite high prices, supply did not increase at the expected pace. Mine production in Q1 reached 856 tons, up only 1% annually, and recycled gold declined by 1%, as owners preferred to hold onto their assets expecting further gains.

Extraction costs surged sharply, with average global costs reaching around $1470 per ounce in mid-2025, the highest in a decade, limiting rapid production expansion opportunities.

Monetary policy… the real driver

The US Federal Reserve cut interest rates by 25 basis points to 3.75-4.00% in October 2025, and analysts forecast a third cut of 25 basis points before the end of 2025. BlackRock’s projections suggest the Fed may bring the rate down to 3.4% by the end of 2026, which would weaken real yields and boost gold’s appeal.

Developments are not limited to the Fed; the European Central Bank and Bank of Japan, both pursuing easing policies, create a weak global environment for real yields and a strong alternative asset in gold.

Major Investment Banks’ Outlooks for 2026

Bullish forecasts

HSBC expects gold to reach $5000 per ounce in the first half of 2026, with an average of $4600, compared to $3455 in 2025. This forecast is based on rising geopolitical risks, increasing global debt, and a wave of new investors.

Bank of America raised its forecast to $5000 as a potential peak with an average of $4400, but warned of possible short-term corrections for profit-taking.

Goldman Sachs adjusted its forecast to $4900 per ounce in 2026, citing stronger inflows into ( ETFs ) and ongoing central bank purchases.

J.P. Morgan projects an average price of $3675 in Q4 2025, with gold reaching $5055 by mid-2026.

The most consensus among analysts ranges from $4800 to $5000 as a potential peak, with an average annual price between $4200 and $4800.

When will gold prices decline in Saudi Arabia and globally?

Downward scenarios and expected corrections

Despite optimism, some analysts warn of potential corrections. HSBC predicts that upward momentum may weaken in the second half of 2026, with a possible correction toward $4200 if widespread profit-taking begins. However, the bank excludes a drop below $3800 unless a severe economic shock occurs.

Goldman Sachs indicates that staying above $4800 would serve as a “price credibility test,” meaning the metal’s ability to stabilize without strong industrial demand.

Specific outlook for the Saudi market

According to global forecasts, if the ounce price reaches $5000 in 2026, then the price in Saudi Riyals could approach 18750 to 19000 SAR (at an exchange rate of 3.75-3.80 SAR per USD). Conversely, if a correction occurs to $4200, the price might fall to approximately 15750 to 16000 SAR.

The key in the Saudi market is exchange rate stability (which is assured given the Riyal’s peg to the dollar), and continued regional demand for gold from individuals and institutions, along with Saudi Central Bank policies regarding reserves.

Factors that could lead gold to decline in 2026

1. Profit-taking by investors

After the sharp rise from $3455 (average 2025) to over $4300, there are strong psychological pressures to take profits at resistance levels. Institutional investors may start reducing their positions, leading to a 5-10% correction.

2. Stable inflation or renewed economic confidence

If inflationary pressures significantly ease or major economies improve their performance, gold’s appeal as a safe haven may diminish, with demand shifting toward higher-yield assets.

3. Sudden global tightening

If central banks keep interest rates higher than expected or raise them due to new inflationary pressures, the opportunity cost of holding gold increases, weakening its position against bonds and other assets.

4. Dollar strength

Any strong rebound of the US dollar against other currencies will weaken foreign demand for gold and push prices lower.

Technical analysis for early 2026

Gold closed trading on November 21, 2025, at $4065.01 per ounce, after touching a peak of $4381.44 on October 20. The short-term rising channel was broken, but the main upward trendline around $4050 remains intact.

The $4000 support level is critical; any clear breach could open the way toward $3800 (50% Fibonacci). On the resistance side, $4200 is the first strong barrier, and surpassing it could lead to $4400 and then $4680.

The RSI indicator shows neutrality at 50, indicating a balanced market between buyers and sellers without a clear bias. The MACD remains above zero, confirming the overall bullish trend in the medium term.

Summary: What to expect in 2026?

Gold price forecasts for 2026 reflect a battle between long-term bullish forces and short-term corrective pressures. Fundamental data support a rise toward $4800-$5000, especially with continued easing monetary policies and geopolitical tensions.

However, when the price of gold will decline depends on the strength of institutional demand, economic risk stability, and developments in global monetary policies. In Saudi Arabia, the price will move in tandem with global prices due to the Riyal’s peg to the dollar, with limited corrections to levels of $4200-$3800 before resuming upward.

Traders and investors need to monitor Federal Reserve decisions, inflation data, and dollar movements as key indicators to determine the actual trend of the yellow metal in the coming year.