Precious metals on the horizon.. Is gold approaching the $5000 mark?

Gold has seen remarkable growth over the past twelve months, surpassing the $4,300 per ounce mark in mid-October before experiencing a correction wave that pulled it back near $4,000 in early November. This volatility has sparked widespread discussions about the upcoming price trajectory, especially with a new year approaching that could bring pivotal turning points in global markets.

Driving Factors for the Rise… Why Gold Now?

The stunning rise coincided with a series of economic and political pressures. Slowing growth in major economies, the return of expansionary monetary policies, fears of escalating sovereign debt, and multi-front geopolitical tensions—all these pushed capital toward safe-haven assets. The choice of gold was not random but a practical response to seeking refuge in an environment filled with uncertainty.

Demand Tells the Story

In the second quarter of this year, total demand for gold reached 1249 tons, including investment purchases, marking a 3% year-over-year increase. But more notably, the total value rose by 45%, reflecting not only the demand volume but also a radical shift in investors’ perception of the metal.

Exchange-traded funds experienced record inflows during the year, pushing managed assets to $472 billion. Holdings reached 3838 tons, approaching a historic peak of about 3929 tons. This rise in both institutional and individual interest indicates a deep strategic shift in how investors view the yellow metal.

Central Banks Spark a New Bet

Major governments and monetary institutions continued to bolster their reserves of the precious metal. Central banks added 244 tons in the first quarter alone, a 24% increase over the five-year quarterly average. Notably, 44% of central banks worldwide now manage gold reserves, up from 37% last year.

China, Turkey, and India led this wave, with Beijing alone adding over 65 tons in the first half, continuing its expansion for the twenty-second consecutive month. This movement sends a clear signal: major institutions believe that precious metals will remain central in the coming years.

Supply Fails to Keep Up

Mine production reached a record level of 856 tons in Q1, but with only a slight 1% annual increase. The problem is that this amount is insufficient to bridge the widening gap between supply and demand. Even more concerning, recycled gold declined by 1% during the same period, as owners prefer to hold onto their assets amid bullish expectations.

Global extraction costs rose to around $1470 per ounce by mid-year, the highest in a decade. This scarcity of supply against growing demand is one of the fundamental pillars supporting continued upward pressure on prices.

Currency Wars and Monetary Policies

The US Federal Reserve has cut interest rates twice since December 2024, with clear signals of further cuts ahead. Markets are now pricing in an additional 25 basis point cut in December, marking the third of the year.

This easing trend is not limited to Washington. The European Central Bank continued its expansionary policy, and the Bank of Japan maintained its accommodative stance. This convergence of global monetary easing reduces the opportunity cost of holding gold, making it more attractive as a safe haven.

The dollar index has fallen about 7.64% from its peak at the start of the year to the end of November, while US 10-year bond yields dropped from 4.6% to around 4.07%. This dual decline in currency strength and real yields directly improves the position of precious metals.

Scenarios for 2026… Where Is the Metal Heading?

Major investment banks have issued similar but optimistic forecasts:

HSBC expects the metal to reach $5000 in the first half of next year, with an annual average of $4600. Bank of America also raised its forecast to $5000 as a potential peak, with an average of $4400, but warned of possible short-term corrections. Goldman Sachs adjusted its estimate to $4900, relying on continued ETF inflows and central bank purchases.

J.P. Morgan predicts prices could reach around $5055 by mid-next year.

Combining these estimates, the most probable range appears to be between $4800 and $5000 as an annual peak, with an average between $4200 and $4800.

Will the Price Decline in 2026?

The natural question arises: after all this rally, will the market experience a reversal?

HSBC warned of potential momentum loss in the second half of 2026, with a possible correction down to around $4200 if investors start taking profits. However, it ruled out a sharp fall below $3800 unless a major economic shock occurs.

Goldman Sachs cautioned that sustained prices above $4800 could put the market to a “credibility test,” where the metal must prove its ability to maintain these high levels.

Meanwhile, analysts from J.P. Morgan and Deutsche Bank agree that gold has entered a new price zone that is difficult to break downward, thanks to a deep strategic shift in investor perception.

Technical Analysis… What Do the Indicators Say?

Gold closed on November 21 at $4065 per ounce, reflecting a state of fluctuation after reaching a high of $4381 in October. The price broke the upward channel on the daily timeframe but still holds onto the main bullish trendline.

Strong support is at $4000—breaking below it with a clear close could target $3800 (50% Fibonacci retracement). On the upside, key resistances are at $4200, $4400, and $4680.

Relative Strength Index (RSI) remains at 50, indicating a neutral state—neither overbought nor oversold. MACD stays above zero, confirming the overall bullish trend.

Technical outlook: Continued sideways trading within an upward-sloping range between $4000 and $4220 in the near term, with the broader picture remaining positive as long as the price stays above the main trendline.

Middle East Outlook

The Middle East region has seen notable activity from central banks. The Central Bank of Egypt added one ton, while its Qatari counterpart added 3 tons in Q1.

Gold price forecasts in Egypt suggest reaching approximately 522,580 EGP per ounce, an increase of about 158.46% over current prices.

In Saudi Arabia and the UAE, if the global target of $5000 per ounce is achieved, this could translate to roughly 18,750 to 19,000 SAR and 18,375 to 19,000 AED, based on current exchange rates. Note that these estimates are relative and depend on assumptions about stable prices and global demand.

Opportunities and Risks Ahead

There are several ways to benefit from gold price movements: physical purchase of bars and coins, investment in ETFs, or owning shares of mining and trading companies. Another option is trading Contracts for Difference (CFDs), which are derivative instruments allowing speculation on price movements.

However, CFDs carry high risks and can lead to rapid capital loss, especially for inexperienced traders. It is essential to choose reliable brokers and practice strict risk management.

Summary… What Path Awaits Us?

Gold’s journey in 2025 was extraordinary, but the real question is what 2026 will bring. If expansionary monetary policies continue, the dollar remains weak, and geopolitical instability persists, gold is indeed poised to break new records approaching $5000.

On the other hand, if inflationary pressures ease and confidence returns to traditional financial markets, the metal may enter a prolonged stabilization phase without reaching ambitious levels. The truth is, gold at this stage reflects not only economic considerations but also the overall trust and anxiety in the global financial system. Monitoring economic and geopolitical events will be key to understanding the yellow metal’s path in the coming months.