New levels for gold on the horizon.. Is $5000 realistic in 2026?

Gold experienced consecutive upward waves throughout 2025, reaching record levels exceeding $4300 per ounce in October, but then declined later to near $4000 in November, sparking intense debates among analysts about the possibility of breaking the $5000 barrier in the coming year.

What is Driving Gold Higher?

This rally is accompanied by a set of supportive economic factors. International institutions estimated that the total demand for gold reached 1249 tons in Q2 2025, a 3% annual increase, with a total value of $132 billion, up 45%.

Central banks play a pivotal role in this rise. Data indicates that 44% of the world’s central banks now hold gold reserves, compared to 37% last year. China alone increased its reserves by over 65 tons in the first half of the year, while Turkey boosted its stockpile to over 600 tons.

Meanwhile, the investment sector gained significant momentum, with large sums flowing into exchange-traded gold funds, raising assets under management to $472 billion, and holdings increasing to 3838 tons, a 6% rise from the previous quarter.

Supply and Demand Equation Supports the Rise

Although mining production reached a record 856 tons in Q1, this slow growth of 1% annually is insufficient to bridge the gap with rising demand. Recycled gold declined by 1% during the same period, as holders preferred to retain their assets based on bullish expectations.

This scarcity equation was exacerbated by rising operational costs for mines. The global average extraction cost reached approximately $1470 per ounce in mid-2025, the highest in a decade, limiting producers’ ability to expand rapidly.

Monetary Policy… The Driver of Expectations

The US Federal Reserve cut interest rates by 25 basis points in October to a range of 3.75-4.00%, marking the second cut since December 2024. Traders expect a further 25 basis point cut in December 2025.

Based on current analyses, the Fed may target an interest rate of 3.4% by the end of 2026 in a moderate scenario. This trend reduces the opportunity cost of holding gold as a non-yielding asset, enhancing its appeal as a hedge.

However, these forecasts heavily depend on inflation stability and labor market responses, raising some caution among analysts.

Currencies and Debt… Additional Factors

The US dollar index declined by 7.64% from its peak at the start of 2025 until November, driven by expectations of lower interest rates. US 10-year bond yields fell from 4.6% in Q1 to 4.07% in November.

This double decline boosted institutional demand for gold, as investors seek to rebalance their portfolios away from dollar-denominated assets.

Additionally, concerns over global sovereign debt increased. The global public debt surpassed 100% of GDP, prompting investors to seek safe havens to protect against erosion of purchasing power.

Geopolitical Tensions Add Upwards Pressure

Ongoing trade disputes and regional tensions led to a 7% annual increase in gold demand. When tensions escalated in the Taiwan Strait and fears of supply disruptions grew, prices jumped above $3400 in July, continuing to rise to over $4300 by mid-October.

Investment Bank Outlooks for 2026

Institutional expectations for gold’s direction in the coming year are converging:

HSBC Bank anticipates a rally reaching $5000 per ounce in the first half of 2026, with an expected average of $4600 during the year.

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

Goldman Sachs adjusted its forecast to $4900 per ounce, citing strong inflows into gold funds and continued central bank purchases.

J.P. Morgan projected gold reaching around $5055 by mid-2026.

Analysts agree on a range between $4800 and $5000 as a potential peak, with an annual average between $4200 and $4800.

Middle East Scenarios

In Arab markets, expectations point to notable increases. Gold prices in Egypt could reach approximately 522,580 EGP per ounce by 2026, a 158.46% increase over current prices.

In Saudi Arabia, if gold prices approach $5000 in some optimistic scenarios, this could translate to about 18750 to 19000 SAR per ounce (at an exchange rate of 3.75-3.80 SAR per USD).

In the UAE, prices will reflect similar movements, with estimates around 18375 to 19000 AED per ounce.

Risks and Potential Corrections

Despite widespread optimism, HSBC noted that upward momentum might weaken in the second half of 2026, with a possible correction toward $4200 when taking profits. However, a significant drop below $3800 is unlikely unless a severe economic shock occurs.

Goldman Sachs warned that prices remaining above $4800 could pose a “price credibility test,” especially with weak industrial demand.

Near-term Technical Analysis

Gold closed November at $4065, after touching $4381 in October. The price broke below an upward channel on the daily timeframe but remains attached to the main bullish trendline.

There is strong support at $4000. A clear daily close below this level could target $3800 (50% Fibonacci retracement).

On the upside, $4200 represents the first resistance level, followed by $4400 and $4680.

The RSI indicator is stable at 50, indicating a neutral market with no clear bias. The MACD remains above the signal line, confirming the overall bullish trend.

Technical analysis suggests continued sideways trading within a mildly upward sloping range between $4000 and $4220 in the near term, with a positive outlook as long as the price stays above the main trendline.

Summary and Future Outlook

The strong movement of gold in 2025 reflects a profound shift in investor perception, viewing it as a long-term strategic asset rather than a short-term speculative tool. As the monetary tightening cycle nears its end and the global economy enters a slowdown phase, the market may experience a tug-of-war between profit-taking and sustained institutional buying waves.

If real yields continue to decline and the dollar remains weak, gold is likely to break new record levels. Conversely, if market confidence returns and inflation subsides, the metal may enter a long-term stabilization phase, potentially delaying the achievement of the $5000 per ounce level.

Gold price forecasts for 2026 will serve as an economic roadmap, monitoring the interaction between monetary, geopolitical, and investment demand factors.