When will gold decrease? New forecasts outline a strong upward trajectory until 2026

The Exceptional Movement of Precious Metals in 2025

Gold prices have experienced an extraordinary start since the beginning of this year, with the yellow metal achieving historic gains that have made it a hot topic among investors and analysts. The price reached a peak exceeding $4,300 per ounce in mid-October before undergoing a corrective pullback toward $4,000 in the subsequent period.

The average price during 2025 was approximately $3,455 per ounce, reflecting a significant increase compared to previous years. This rise was not random but resulted from the convergence of several strong economic and political factors that drove capital swiftly toward this traditional safe haven.

Factors Supporting Demand: The Story of Numbers and Trends

Investment demand breaks records

Data from the World Gold Council painted an exciting picture of the volume of interest in the metal. In Q2 2025, total demand reached 1,249 tons, valued at $132 billion, indicating a substantial increase in investment interest. The first quarter also recorded the highest seasonal demand since 2016, with 1,206 tons.

Gold ETFs( experienced massive cash inflows, with assets under management reaching $472 billion and holdings rising to 3,838 tons. This figure approaches the historic peak of 3,929 tons, indicating that institutional demand remains intense.

In the US alone, gold fund inflows totaled $21 billion in the first half of the year, offsetting a slight decline in traditional consumer demand. Bloomberg data showed that 28% of new investors in developed markets added gold to their portfolios for the first time.

) Central banks continue massive purchases

Central banks have not stopped supporting the price. These institutions added 244 tons during Q1 2025, a 24% increase over the five-year average. Importantly, 44% of central banks worldwide now manage gold reserves, up from 37% in 2024.

China, Turkey, and India led the buying spree. The People’s Bank of China alone added more than 65 tons for the twenty-second consecutive month, while Turkey increased its reserves to over 600 tons. These moves reflect a strategic desire to diversify reserve assets away from the US dollar.

Supply shortage puts upward pressure on prices

On the supply side, mine production hit a record 856 tons in Q1, a modest 1% annual increase. The problem is that this limited supply does not keep pace with the significantly rising demand. Additionally, recycled gold declined by 1%, as holders preferred to keep it in anticipation of further increases.

The mining industry faces severe cost challenges. The average global extraction cost rose to $1,470 per ounce in mid-2025, the highest in a decade. This means any expansion in production will be slow and costly.

Global Monetary and Economic Context

Federal Reserve decisions support bullish expectations

The US Federal Reserve has begun a dovish path, lowering interest rates by 25 basis points in October 2025 to a range of 3.75-4.00%, marking the second cut since December 2024. Market expectations point to an additional 25 basis point cut in December.

Interest rates could reach 3.4% by the end of 2026 according to some estimates. This decline in real yields reduces the “opportunity cost” of holding gold, enhancing its appeal as an investment tool.

Global monetary policies diverge

While the Fed moves toward easing, the European Central Bank continues tightening to combat inflation, whereas the Bank of Japan maintains its accommodative policy. This divergence creates a complex environment that has reinforced gold’s role as a global balancing safe haven.

Dollar decline and bond yields fall

The dollar index decreased by about 7.64% from its peak at the start of the year through November 2025. Simultaneously, US 10-year bond yields fell from 4.6% to 4.07%. This duo reduced the attractiveness of dollar-denominated assets, prompting investors to seek alternative hedges.

Geopolitical Risks: An Unforeseen Driver

Trade conflicts between the US and China and Middle East tensions prompted investors to increase their gold holdings. Reuters reported that geopolitical uncertainty in 2025 raised demand by 7% year-over-year.

As concerns about the Taiwan Strait and energy supplies escalated, spot prices surged above $3,400 in July. With ongoing uncertainty, the metal continued its ascent to surpass $4,300 by October.

Sovereign Debt and Inflation: Ongoing Concerns

Global public debt exceeded 100% of GDP according to the IMF. This figure raised fears about the sustainability of fiscal policies. As these concerns grew, investors turned to gold as a hedge against loss of purchasing power.

Bloomberg Economics data showed that 42% of major hedge funds increased their gold positions during Q3 2025, reflecting a growing conviction in the metal’s defensive role.

Technical Analysis: The Current Balance

Gold closed on November 21, 2025, at $4,065 after touching a high of $4,381.44 on October 20. The price broke below the ascending channel line on the daily chart but remains anchored around the main trend line near $4,050.

The Relative Strength Index ###RSI( stabilized at 50, indicating a neutral market state between buying and selling pressures. The MACD remains above zero, confirming that the overall trend is still bullish.

The $4,000 level is a critical support. If the price closes clearly below it, a target of $3,800)Fibonacci 50%( correction could be expected. Conversely, resistance levels are at $4,200, followed by $4,400 and $4,680.

Major Investment Bank Outlooks for 2026

) Ambitious forecasts toward $5,000

HSBC predicts gold will reach $5,000 per ounce in the first half of 2026, with an expected annual average of $4,600. Bank of America also raised its forecast to $5,000 as a potential peak, with an average of $4,400, but noted a possibility of short-term correction due to profit-taking.

Goldman Sachs adjusted its forecast to $4,900 per ounce, citing stronger inflows into gold ETFs and continued central bank purchases. JPMorgan’s study projected a rise to $5,055 by mid-2026.

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

When will gold prices decline: When will the correction start?

Despite overall optimism, HSBC warned that momentum might weaken in the second half of 2026, with potential correction toward $4,200 if investors start profit-taking. However, a drop below $3,800 is unlikely unless a major economic shock occurs.

Goldman Sachs indicated that sustained prices above $4,800 could face a “price credibility test,” meaning a challenge to gold’s ability to maintain its levels amid weak industrial demand. JPMorgan and Deutsche Bank analysts agreed that gold has entered a new price zone that is difficult to break downward due to strategic shifts in investor perception.

Regional Outlook: Middle East on the Map

Gold reserves held by central banks in the Middle East increased. The Central Bank of Egypt added 1 ton, and the Central Bank of Qatar added 3 tons during Q1 2025.

Based on global forecasts indicating a price approaching $5,000, gold in Egypt could reach approximately 522,580 EGP per ounce, an increase of about 158%. In Saudi Arabia and the UAE, the global outlook could translate into roughly 18,750–19,000 SAR and 18,375–19,000 AED per ounce respectively, assuming exchange rates remain stable.

Conclusion: Multiple Scenarios

The future outlook for gold in 2026 is complex and multi-scenario. If real yields continue to decline and the dollar remains weak, the metal is likely to break new records. Conversely, if inflation eases and market confidence returns, a prolonged stabilization phase could prevent levels from reaching $5,000.

Monitoring monetary, geopolitical, and investment factors has become essential to understanding gold’s movement dynamics in the coming period, especially as the monetary tightening cycle nears its end and the global economy enters a potential slowdown phase.