Will gold decrease in 2026? A comprehensive analysis of the price trajectory toward record levels

During 2025, gold prices experienced a significant rise reaching $4,381 per ounce in mid-October, before a slight correction to levels around $4,000 in November, sparking widespread debate about what the coming year holds for gold prices and whether the metal can break through the $5,000 barrier.

2026 Trends According to Major Global Banks

Major banks’ forecasts lean towards a notable optimism regarding the trajectory of gold prices in the upcoming year:

HSBC expects a strong increase, with gold potentially reaching $5,000 per ounce in the first half of 2026, with an annual average of $4,600, compared to $3,455 in 2025. This surge is supported by increasing geopolitical risks and rising global debt levels.

Bank of America raised its forecast to $5,000 as a potential peak during 2026, with an annual average of $4,400, but warned of possible short-term corrections when investors take profits.

Goldman Sachs adjusted its forecast to $4,900 per ounce, citing expected strong inflows into gold ETFs and continued central bank purchases.

J.P. Morgan projected prices near $5,055 by mid-2026, with an estimated Q4 2025 average of $3,675.

The most common range among analysts is between $4,800 and $5,000 as a projected peak, with an annual average between $4,200 and $4,800.

Factors Supporting Gold Price Increases

Global Demand Continues

The World Gold Council estimated that total demand in Q2 2025 reached 1,249 tons, up 3% annually, with value rising to $132 billion, up 45%. The first quarter of the same year recorded 1,206 tons, the highest quarterly level since 2016.

Gold ETFs attracted massive inflows, with assets under management reaching $472 billion and holdings totaling 3,838 tons, up 6% from the previous quarter, very close to the all-time peak of 3,929 tons.

North America led demand with 345.7 tons out of a total of 618.8 tons globally from the start of 2025 to September 30, followed by Europe with 148.4 tons and Asia with 117.8 tons.

Central Banks Continue Buying

Central banks added 244 tons in Q1 2025, a 24% increase over the five-year quarterly average. Currently, 44% of global central banks hold gold reserves compared to 37% in 2024, reflecting a strategic shift towards diversification away from the dollar.

China alone added over 65 tons, continuing its buying streak for the twenty-second consecutive month, while Turkey increased its reserves to over 600 tons. The council expects these purchases to remain a key driver of demand through the end of 2026.

Limited Supply Deepens the Gap

Mine production reached 856 tons in Q1 2025, a slight increase of 1% annually, but insufficient to meet the rising demand and limited supply. Recycled gold decreased by 1%, as owners prefer to hold onto their inventories in anticipation of further gains.

The global average extraction cost rose to $1,470 per ounce in mid-2025, the highest in a decade, constraining production expansion and deepening the supply shortfall.

Monetary Policy and the Dollar: Key Drivers

Expected Rate Cuts

The Federal Reserve cut interest rates by 25 basis points in October 2025 to a range of 3.75-4.00%, the second cut since December 2024. Markets are pricing in another 25 basis point cut at the December meeting, making it the third reduction since the start of the year.

Reports from BlackRock suggest the Fed may target an interest rate of 3.4% by the end of 2026 in a moderate scenario, which would reduce real bond yields and boost gold’s appeal as a safe haven.

Weakening Dollar and Low Yields

The dollar index declined by about 7.64% from its peak in early 2025 to November 21, 2025, influenced by rate cut expectations and slowing growth.

U.S. 10-year bond yields fell from 4.6% in Q1 to 4.07% on November 21, 2025.

This dual decline strongly supports bullish gold price expectations as there is an inverse relationship between the dollar/yields and gold prices.

Geopolitical Risks Boost Defensive Demand

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

As tensions escalated around Taiwan and energy supplies, prices surged to $3,400 in July 2025, then broke through $4,300 in October. This behavior illustrates how gold reacts swiftly to crises, opening the door to $5,000 in 2026 if pressures persist.

Global Debt and Inflation: Sustaining Factors

Global public debt exceeded 100% of GDP according to the IMF, raising concerns about fiscal sustainability and loss of purchasing power, prompting investors to turn to gold as a safe alternative.

The World Bank forecasted a 35% increase in gold prices in 2025, with a slow decline expected in 2026 as inflationary pressures ease, but prices will remain historically high.

Bloomberg data showed that 42% of major hedge funds increased their gold holdings during Q3 2025 as a hedge against sovereign debt risks.

Are There Risks to the Upside?

Despite bullish forecasts, potential obstacles exist:

HSBC warned that momentum might weaken in the second half of 2026, with a possible correction toward $4,200 if investors take profits, but ruled out a drop below $3,800 unless a major shock occurs.

Goldman Sachs warned that sustained prices above $4,800 could lead the market to face a “price credibility test,” especially with weak industrial demand.

J.P. Morgan and Deutsche Bank agreed that gold has entered a new price zone that is difficult to break downward due to strategic shifts in investor perception of it as a long-term asset.

Short-term Technical Analysis

Gold closed on November 21, 2025, at $4,065.01, after touching $4,381.44 on October 20.

The price broke below the upward channel on the daily chart but remains above the main upward trendline, indicating relative stability above $4,050.

Strong support is at $4,000; a break below could open the way toward $3,800 (Fibonacci retracement level 50%).

First strong resistance at $4,200, then $4,400 and $4,680.

The RSI indicator is steady at 50, reflecting a neutral market without clear overbought or oversold signals.

The MACD line is above zero, confirming that the overall trend remains bullish, suggesting continued sideways trading within a slightly upward range between $4,000 and $4,220 in the near term.

Price Outlook in the Middle East

Egypt

According to CoinCodex forecasts, the gold price could reach approximately 522,580 Egyptian pounds per ounce in 2026, an increase of 158.46% over current prices.

Saudi Arabia

If the optimistic scenario of $5,000 per ounce materializes, with a stable exchange rate, the price could approach 18,750 to 19,000 Saudi riyals.

UAE

Under the same assumptions, the price could reach around 18,375 to 19,000 UAE dirhams per ounce.

It is important to note that these forecasts assume exchange rate stability, continued global demand, and no major economic shocks.

Summary of Expectations

Gold price forecasts for 2026 indicate a strong likelihood of surpassing $5,000, supported by fundamental factors: sustained investment demand, accelerated central bank purchases, limited supply, expected accommodative monetary policy, and a weak dollar.

However, the path will not be linear; short-term corrections to levels around $4,200-$4,400 are possible when taking profits, and a sharp decline below $3,800 would require a major economic shock.

Ultimately, whether gold will decline in 2026 depends on the balance between profit-taking and geopolitical and monetary risks — the latter appearing more prominent in the near-term outlook.