[Editor’s Note: Find out the latest gold prices here.]
Gold’s record-breaking run in 2025 is setting the stage for an unusually uncertain year ahead, with the World Gold Council (WGC) forecasting that prices in 2026 will remain broadly rangebound but exposed to significant upsides — and equally sharp downsides — depending on how global risks unfold.
In its Gold Outlook 2026, the council highlights a metal propelled this year by a combination of relentless geopolitical stress, a weaker US dollar, softer interest rates and the strongest official-sector buying spree in more than half a century.
So far in 2025, gold has risen 26 per cent in US-dollar terms, reaching double-digit gains in virtually every major currency. It notched more than fifty all-time highs and delivered returns of more than sixty per cent since January. That surge was fuelled by what the WGC calls a “supercharged geopolitical and geoeconomic environment,” characterised by overlapping conflicts, trade fragmentation, and rising investor suspicion about the durability of global growth. As a result, investment demand soared, with global gold ETFs alone attracting inflows of around seventy-seven billion dollars this year and adding more than 700 tonnes to their holdings.
However, the key question for 2026 remains whether gold has already peaked — or whether new global shocks could send prices tearing higher again. Using its Gold Valuation Framework, the WGC analysed what current market assumptions imply for the metal’s trajectory. Under the base case—where economists’ consensus plays out—gold is expected to move sideways, with limited gains of zero to five per cent in the second half of 2025 feeding into a largely rangebound 2026. Markets are currently pricing in global GDP growth of roughly 2.7 to 2.8 per cent, around 75 basis points of additional Federal Reserve rate cuts and a slightly firmer dollar, all variables that tend to ground gold rather than propel it.
But the council is quick to warn that “the macroeconomy rarely follows the path that market consensus dictates.” Even a moderate slowdown — what the WGC terms a “shallow slip” — could revive the rally. In that scenario, gold could climb five to fifteen per cent next year as US growth softens further, risk appetite retreats and the Fed cuts more aggressively than expected. Lower yields combined with a weaker dollar have historically created highly supportive conditions for gold, a pattern analysts say is likely to repeat.
A deeper downturn — the “doom loop” scenario — would amplify those tailwinds. Should yields plunge and geopolitical tensions intensify, the WGC forecasts that gold could surge by fifteen to thirty per cent as investors seek refuge. Several strategists note that this extreme outcome cannot be ruled out in a year marked by political transitions in major economies, supply-chain instability and ongoing conflict hotspots. “When multiple global risks cluster together, gold becomes the anchor asset,” said one metals strategist at a European investment bank. “If we get a genuine shock, there is still significant dry powder on the sidelines.”
Central banks remain one of the most influential forces in the market. Official-sector buying has been exceptionally strong in 2025, led by emerging-market institutions seeking to diversify away from the dollar. Many are still rebuilding their reserves after years of under-allocation, and the council believes this structural rotation is far from over. “There are good reasons to expect central bank buying to continue,” the WGC said. Any sharp pullback, however, would remove a major pillar of support and could exert downward pressure on prices.
India and China — two markets that shape global physical demand —introduce additional uncertainties. In India, more than 200 tonnes of gold jewellery have been pledged through the formal sector this year alone. While this reflects the metal’s role as a financial safety net, it also means that a sharp economic downturn could trigger forced sales and increase secondary supply. In China, new investment channels such as insurance companies and pension funds could expand gold’s investor base if market conditions deteriorate further.
Still, the WGC stresses that downside risks are real. A strong rebound in US growth driven by pro-growth policies could produce a reflationary dynamic: higher inflation, rising bond yields and a stronger dollar. All three tend to weigh heavily on gold. In that case, the metal could correct by five to twenty per cent from current levels, with ETFs likely to see sustained outflows as investors rotate back into equities and yield-bearing assets.
Precious metals analysts say that while gold’s exceptional 2025 performance may limit near-term enthusiasm, persistent geopolitical tension, election-year volatility and still-elevated global debt levels mean safe-haven demand will not vanish. As the WGC concludes, “In a world where shocks and surprises are increasingly the norm, gold’s capacity to provide diversification and downside protection remains as relevant as ever.”
