Gold in 2026.. Will it reach the $5000 peak? Gold price forecasts and driving factors for the rise

As gold closes out 2025 on an extraordinary rally, markets are beginning to discuss the upcoming chapter: what awaits gold in 2026? Will the upward wave continue, or have downward corrections started to knock on the door?

Current Gold Price and the Path Traveled So Far

2025 has been a pivotal year for the yellow metal, breaking the $4300 per ounce barrier in mid-October, then retreating later near $4000. The annual average reached approximately $3455 per ounce, with an unprecedented peak in October followed by a partial collapse in November.

This volatility sparked intense debates among analysts: was what happened merely a natural correction before a bigger leap? or has the market begun to doubt the sustainability of this rise?

Major Banks’ Gold Price Forecasts for 2026

Surprisingly, the consensus among the big banks points in the same direction: the rally continues, perhaps with even greater strength.

HSBC expects gold to reach $5000 in the first half of 2026, with an annual average of $4600, supported by increasing geopolitical risks and financial uncertainty.

Bank of America also raised its forecast to $5000 as a potential peak, with an average of $4400, but warned of short-term correction possibilities if investors start taking profits.

Goldman Sachs adjusted its forecast to $4900, citing strong inflows into gold ETFs and continued central bank purchases.

JPMorgan predicted gold reaching around $5055 by mid-2026.

The most consensus range among analysts extends between $4800 and $5000, with an annual average between $4200 and $4800.

Factors Behind the Bullish Gold Price Expectations

1(. Record-breaking demand

Global demand for gold has reached unprecedented levels. The World Gold Council reported that total demand in Q2 2025 was 1249 tons, up 3% year-over-year, with value soaring to $132 billion, a staggering 45% increase.

Gold ETFs )ETFs### experienced frantic inflows, raising their assets under management to $472 billion with 3838 tons of holdings, nearing the estimated all-time peak of 3929 tons.

New retail investors are coming in strong: Bloomberg data shows that 28% of new investors in developed markets added gold to their portfolios for the first time in recent years, driven by ongoing bullish expectations and fears of stock and crypto volatility.

2###. Central banks are aggressively buying

Global central banks have never stopped buying gold. In Q1 2025 alone, they added 244 tons, a 24% increase over the five-year quarterly average.

Now, 44% of global central banks hold gold reserves, up from 37% in 2024. China alone added over 65 tons, marking its twenty-second consecutive month of continuous purchases. Turkey increased reserves above 600 tons, and India is actively following suit.

Forecasts indicate that central banks will remain the primary demand support until the end of 2026, especially in emerging markets seeking to protect their currencies.

3###. Supply does not meet demand

Mine production in Q1 2025 was only 856 tons, up 1% annually, a minimal increase that fails to close the widening gap with demand.

Worse still: recycled gold declined by 1%, as owners prefer to hold onto their holdings in anticipation of higher prices. This negative balance between supply and demand creates real scarcity.

Production costs have also risen: the global average extraction cost reached $1470 per ounce in mid-2025, the highest in a decade, limiting production expansion and making any increase costly and slow.

4(. The Federal Reserve opens the door for more cuts

The US Federal Reserve cut interest rates in October 2025 by 25 basis points to 3.75-4.00%, the second cut since December 2024. The accompanying statement indicated further cuts are expected if the labor market weakens.

Markets are pricing in another 25 basis point cut at the December 2025 Fed meeting, making it the third cut of the year.

BlackRock data suggests the Fed may target a 3.4% interest rate by the end of 2026 in a moderate scenario. Each cut weakens the dollar and reduces real bond yields, boosting gold’s appeal as a non-yielding asset.

) 5###. Weak dollar and slipping yields

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

US 10-year bond yields declined from 4.6% in Q1 to 4.07% in November. This double decline makes gold more attractive to investors seeking hedges.

Bank of America analysts see that if this trend continues with real yields stabilizing around 1.2%, gold could enter a sustainable upward range.

6(. High geopolitical risks remain

Trade tensions between the US and China, along with Middle East tensions, have prompted investors to hedge via gold. Reuters reported that geopolitical uncertainty in 2025 increased demand by 7% annually.

When tensions escalated in the Taiwan Strait and energy supply fears grew, gold surged to $3400 in July, then over $4300 in October.

This behavior indicates that any new geopolitical shock in 2026 could push prices to record levels.

) 7###. Global debt and residual inflation

Global public debt exceeded 100% of GDP according to IMF, raising concerns about the sustainability of fiscal policies. This drives investors toward gold as a refuge from losing purchasing power.

42% of major hedge funds increased their gold positions in Q3 2025, according to Bloomberg Economics data.

Warnings and Correction Scenarios

Not everything is rosy. HSBC warned that the upward momentum could weaken in the second half of 2026, with correction risks down to $4200 if investors start taking profits. However, it ruled out a drop below $3800 unless a major economic shock occurs.

Goldman Sachs indicated that sustained prices above $4800 could test the market’s “price credibility,” questioning whether gold can maintain high levels amid declining industrial demand.

JPMorgan and Deutsche Bank agreed that gold has entered a new price zone that is difficult to break downward, thanks to a deep strategic shift in investor perception of it as a long-term asset rather than a short-term speculation.

Technical Analysis and Current Readings

The close on Friday, November 21, 2025, was at $4065.01 per ounce, after a peak of $4381.44 on October 20.

The price broke below the upward channel on the daily chart but remains anchored to the main trendline connecting rising lows around $4050.

Critical support levels:

• $4000: a very strong support zone; a break below could open the way toward $3800
• $3800: Fibonacci 50% retracement level

Resistance levels:

• $4200: first strong resistance
• $4400: historic resistance
• $4680: next resistance

The Relative Strength Index (RSI) is steady at 50, indicating a neutral market with no clear bias. The MACD remains above zero, confirming the overall bullish trend.

Technical outlook: Gold is expected to trade within a sideways upward-sloping range between $4000 and $4220 in the near term, with the overall picture remaining positive as long as it stays above the main trendline.

Gold Price Outlook in the Middle East Region

Egypt The Central Bank of Egypt added one ton of gold in Q1 2025. CoinCodex forecasts suggest gold could reach approximately 522,580 EGP per ounce by 2026, a 158.46% increase compared to current prices.

Saudi Arabia If gold reaches $5000 as major banks forecast, converting it to the Saudi Riyal at an exchange rate of 3.75-3.80 would give around 18750 to 19000 SAR per ounce.

UAE The same conversion to AED could reach about 18375 to 19000 AED per ounce.

Important note: Middle East forecasts depend on assumptions including stable exchange rates in Saudi Arabia and the UAE, continued global demand, and no major economic shocks.

Summary: What to Expect in 2026?

Gold price forecasts for the coming year point to a battle between two forces: ongoing demand and supporting factors on one side, and profit-taking on the other.

If real yields continue to decline and the dollar remains weak, gold is poised to hit new record highs near $5000 or even higher.

Conversely, if inflation subsides and market confidence returns, the metal may enter a long-term stabilization phase away from target levels.

The bottom line: 2026 will be a true test of gold’s ability to remain a safe haven in an unstable economic world. Economic data and monetary policy decisions will be crucial, and investors are closely watching every move.