Is gold ready to break $5000 in 2026? A comprehensive analysis of driving factors and risks

In 2025, the yellow metal experienced a remarkable historic movement, reaching record levels above $4,300 per ounce before dropping back to around $4,000. This volatility sparked widespread discussions about the prospects for 2026, especially after markets began pricing in expectations of reaching $5,000 per ounce as a possible maximum.

What drove gold to rise so strongly?

Data indicates that global demand for gold reached exceptional levels. The World Gold Council recorded total demand of 1,249 tons in Q2 2025, up 3% annually, with a total value of $132 billion, an increase of 45%.

Gold ETFs (ETFs) experienced massive inflows, with assets under management reaching $472 billion and holdings totaling 3,838 tons, up 6% from the previous quarter. This figure approached the all-time peak of 3,929 tons, reflecting strong institutional confidence in the metal as a safe haven.

On the other hand, central banks around the world continue to buy gold at a strong pace. These institutions added 244 tons during Q1 2025 alone, a rate exceeding the five-year average by 24%. Now, 44% of global central banks hold gold reserves, compared to only 37% in 2024.

The supply and demand dilemma plays its role

Despite rising prices, supply did not respond at the same pace. Mine production reached only 856 tons in Q1 2025, a slight increase of 1% annually. More importantly, recycled gold decreased by about 1% during the same period, as owners of gold pieces preferred to hold onto their assets in anticipation of continued price increases.

This gap between rising demand and limited supply creates ongoing upward pressure. Additionally, global extraction costs have risen to around $1,470 per ounce in mid-2025, the highest level in a decade.

Monetary policy: the main catalyst

The US Federal Reserve began a rate-cutting cycle, lowering rates by 25 basis points in October 2025 to a range of 3.75-4.00%. Markets are now pricing in an additional 25 basis point cut expected in December 2025.

Reports from BlackRock suggest that the Fed may target an interest rate of 3.4% by the end of 2026. This scenario would lead to a decline in real bond yields, reducing the opportunity cost of holding gold as a non-yielding asset.

Globally, the European Central Bank and the Bank of Japan maintain easing policies, weakening local currencies and boosting the attractiveness of gold.

Debt and geopolitical risks intensify

Global public debt has surpassed 100% of GDP, according to the IMF. This reality has driven investors to seek safe havens, and gold has become the first choice.

Trade tensions between the US and China, along with Middle East tensions, raised gold demand by 7% year-over-year according to Reuters. When tensions around the Taiwan Strait escalated last spring, spot prices jumped above $3,400 per ounce rapidly.

The dollar and yields fall together

The dollar index declined by about 7.64% from its peak at the start of 2025 until November 21, 2025. US 10-year bond yields fell from 4.6% in Q1 to 4.07% in late November.

This double decline in the dollar and yields directly supported institutional demand for the precious metal.

Major analyst forecasts for 2026

The outlooks drawn by leading analysts are very clear:

HSBC expects a surge in gold prices to reach $5,000 per ounce in the first half of 2026, with an average forecast of $4,600 for the entire year.

Bank of America raised its forecast to $5,000 as a potential peak, with an 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 continued strong inflows into gold ETFs and ongoing institutional purchases.

J.P. Morgan revealed that gold could reach around $5,055 by mid-2026.

The most common range among these analysts extends between $4,800 and $5,000 as a potential peak, with an average between $4,200 and $4,800.

Is a correction coming?

No rosy outlook is without reservations. HSBC warned that the upward momentum might weaken in the second half of 2026, with corrections possibly down to $4,200 if investors start profit-taking. However, it excluded a drop below $3,800 unless a major economic shock occurs.

Goldman Sachs pointed out that sustained prices above $4,800 could test the market’s “price credibility,” meaning a test of gold’s ability to stabilize amid weak industrial demand.

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

Regional market forecasts

In Egypt, gold price forecasts suggest the possibility of reaching around 522,580 Egyptian pounds per ounce, an increase of approximately 158.46% over current prices.

In Saudi Arabia, if exchange rates stabilize, the expectation of $5,000 per ounce translates to about 18,750 to 19,000 SAR (at an exchange rate of 3.75 to 3.80 SAR per dollar).

In UAE, the same conversion yields an estimate close to 18,375 to 19,000 AED per ounce.

Technical analysis indicates a temporary balance

Gold closed trading on November 21, 2025, at $4,065.01 per ounce, after touching its peak at $4,381.44 on October 20, 2025.

The price broke the upward channel line but remains attached to the main rising trendline connecting lows around $4,050. A strong support level is at $4,000.

The Relative Strength Index (RSI) remains at 50, indicating full neutrality in the market without a clear bias toward any direction. The MACD remains above zero, confirming that the overall trend is still upward.

The technical outlook suggests continued sideways trading within an upward-sloping range between $4,000 and $4,220 in the near term, with the overall picture remaining positive as long as the price stays above the main trendline.

Summary: Is $5,000 inevitable or just a distant dream?

Despite the strong movement and optimism around gold, price forecasts will depend on the balance between profit-taking and new buying waves. As the monetary tightening cycle nears its end and the global economy enters a slowdown phase, a real struggle may emerge between these two forces.

If real yields continue to decline and the dollar remains weak, then gold price forecasts point to new record highs above $5,000. Conversely, if inflation recedes and market confidence returns, the metal could enter a long-term stabilization phase preventing ambitious levels.

What remains certain is that gold will maintain its role as a safe haven as long as geopolitical and economic risks remain elevated on the global stage.