Gold approaches $5000.. Will 2026 witness a new historic leap?

When gold prices surpassed $4,300 per ounce last October, investors began to wonder: is this the final ceiling or just a station on a longer journey? The answer lies in understanding the factors that drove the price upward and forecasting what the coming year will bring.

Why did gold rise so sharply in 2025?

The numbers speak clearly: the average annual price reached $3,455, but gold was not satisfied with that. Three main factors pushed it higher:

First: Investors rediscovered gold

Gold ETFs absorbed massive cash inflows of $21 billion during just the first half of the year. Total assets under management reached $472 billion, with holdings rising to 3,838 tons, approaching the all-time peak of 3,929 tons. About 28% of new investors in developed markets added gold to their portfolios for the first time, driven by extensive media coverage and bullish price expectations.

Second: Central banks kept buying

There was a steady increase in demand from official institutions. The Chinese central bank alone added over 65 tons in the first half, continuing its purchases for the twenty-second consecutive month. Turkey increased its reserves to over 600 tons. Now, 44% of the world’s central banks hold gold reserves, up from 37% a year ago, reflecting a strategic desire to diversify away from the dollar.

Third: Supply did not keep pace with demand

Production reached 856 tons in the first quarter of 2025, but that’s not enough. Recycled gold decreased by 1%, as owners prefer to hold onto their assets expecting further gains. Global extraction costs jumped to $1,470 per ounce—the highest in a decade—discouraging rapid expansion in production.

Economic context: Why are investors choosing gold now?

The Fed cuts interest rates

The U.S. Federal Reserve decided to cut interest rates by 25 basis points in October, bringing the range to 3.75-4.00%, the second cut since December 2024. Markets are currently pricing in another 25 basis point cut in December. The Fed may target an interest rate around 3.4% by the end of 2026 in a moderate scenario. When rates fall, the opportunity cost of holding non-yielding gold decreases.

Other major central banks move in unison

The European Central Bank is tightening policy to combat inflation, while the Bank of Japan maintains its easing stance. This divergence in policies has created an uncertain environment that boosted demand for the safest haven: gold.

The dollar weakens and debt rises

The dollar index has fallen about 7.64% from its peak at the start of the year until November 21. U.S. 10-year bond yields declined from 4.6% to 4.07%. This double decline makes gold more attractive to foreign investors. Meanwhile, global public debt has exceeded 100% of GDP, according to the IMF, raising concerns about fiscal sustainability and fueling demand for safe assets.

Geopolitical tensions drive buying

Trade conflicts between the U.S. and China, tensions in the Middle East, and fears of energy supply disruptions—all increased demand for gold by 7% year-over-year. When tensions over Taiwan escalated mid-year, spot prices jumped above $3,400.

What do experts expect for 2026?

Optimistic scenario: $5,000 possible

• HSBC forecasts gold reaching $5,000 per ounce in the first half of 2026, with an annual average around $4,600 (compared to $3,455 in 2025).

• Bank of America raised its forecast to $5,000 as a potential peak, with an expected average of $4,400, but warned of a short-term correction if investors start taking profits.

• Goldman Sachs adjusted its forecast to $4,900 per ounce, citing stronger inflows into gold funds and continued central bank purchases.

• J.P. Morgan expects gold to reach $5,055 by mid-2026.

The recurring baseline range: 4800-5000 dollars as a peak, and 4200-4800 dollars as an annual average.

Will gold decline before reaching those levels?

Technical corrections are expected

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

Goldman Sachs cautioned that sustained prices above $4,800 could test the market’s credibility, especially with weakening industrial demand.

But analysts at J.P. Morgan and Deutsche Bank agree that gold has entered a new price zone that is difficult to break downward, thanks to a strategic shift in investor perception of it as a long-term asset.

Technical analysis: What does the chart tell us?

Gold closed on Friday, November 21, at $4,065.01, after touching a record high of $4,381.44 on October 20. The price broke a short-term ascending channel but still holds the main upward trendline on the medium term.

Key levels:

• Current support: $4,000—if broken with a clear daily close, the price could target $3,800 (50% Fibonacci retracement).

• First resistance: $4,200—breaking this opens the way to $4,400 and then $4,680.

• RSI indicator: sits at 50, indicating a neutral market—neither overbought nor oversold.

• MACD: the signal line is above zero, confirming the continuation of the overall upward trend.

Technical outlook: Expect continued sideways trading with a slight upward bias between $4,000 and $4,220 in the near term, with the bigger picture remaining positive as long as the price stays above the main trendline.

How to invest in gold?

Several options:

1. Buying physical gold bars – the traditional safe method.

2. Gold ETFs – easy and highly liquid.

3. Mining stocks – leverage the sector’s growth.

4. CFDs – speculate on short-term movements, but carry higher risks and require a reliable broker with fast execution, strong analytical tools, and proper risk management.

Summary

Gold forecasts for 2026 point to continued rise toward record levels, supported by declining U.S. interest rates, ongoing central bank buying, and strong investor demand. The baseline scenario expects a range between $4,800 and $5,000 as a peak, but short-term corrections are likely.

The real challenge will depend on the path of inflation and global monetary policy. If confidence in financial assets wanes and real interest rates keep falling, gold is poised to break new resistance levels. Conversely, if market confidence returns and real yields rise, the metal may enter a longer stabilization phase, delaying the $5,000 target.