Gold Bullish Scenarios 2026.. Will it Break the $5000 Barrier?

Gold prices experienced notable developments in 2025, reaching a historic peak exceeding $4,381 per ounce in October before undergoing a relative correction, raising questions about the expected price trajectory for the coming year. A comprehensive analysis of economic and political factors provides clear guidance on potential gold price trends in 2026.

Strong Performance and Positive Indicators

The average gold price in 2025 was approximately $3,455 per ounce, reflecting a noticeable rise compared to previous years. The total market value of demand exceeded $132 billion in Q2, a 45% increase over the same period in 2024.

Support factors focused on several main areas: first, increasing investment demand reaching 1,249 tons in Q2 with a 3% annual growth. Second, ETF gold funds achieved exceptional inflows, raising assets under management to $472 billion and holdings to 3,838 tons. Third, central bank purchases increased by 24% above the five-year quarterly average.

Role of Global Central Banks

Central banks worldwide formed a strong backbone supporting demand, adding 244 tons during Q1 of 2025 alone. The percentage of central banks holding gold reserves reached 44% of all global banks, up from 37% in 2024.

China, Turkey, and India led the list of buyers, with the People’s Bank of China alone adding over 65 tons in six months. This trend reflects a growing desire to diversify reserves away from the US dollar, especially in emerging markets.

Supply and Demand: Ongoing Imbalance

Mine production reached a record 856 tons in Q1 2025, but this increase was limited to just 1% year-over-year. Conversely, recycled gold decreased by 1%, as many owners preferred to hold onto their assets expecting further rises.

This supply shortage is attributed to rising operational costs, with global average extraction costs around $1,470 per ounce in mid-2025, the highest in a decade. This reality limits the ability to ramp up production quickly, deepening the supply-demand gap.

Monetary Policy and Interest Rates

The US 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. Traders expect an additional 25 basis point cut at the December meeting.

Reports from BlackRock forecast the Fed targeting an interest rate of about 3.4% by the end of 2026 in a moderate scenario. These rate cuts positively impact gold prices by reducing opportunity costs for non-yielding assets.

Major Central Banks and Divergent Policies

While the US Federal Reserve adopted an easing stance, the European Central Bank continued a more hawkish policy. The Bank of Japan maintained its known easing approach. These differences created a volatile economic environment, increasing the appeal of precious metals as safe havens.

Inflation and Global Debt

The International Monetary Fund warned that global public debt exceeded 100% of GDP. The World Bank estimated a 35% rise in gold prices during 2025, expecting relative stability in 2026 with prices remaining high.

Bloomberg Economics data showed that about 42% of major hedge funds increased their gold positions in Q3 2025, attempting to hedge against long-term financial risks.

Geopolitics and Safe-Haven Demand

Trade conflicts and regional tensions contributed to a 7% year-over-year increase in gold demand, according to Reuters. As concerns about Taiwan and energy supplies escalated, prices surged above $3,400, later surpassing $4,300 in October.

US Dollar and Real Yields

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

This dual decline in the dollar’s value and yields reflects strong institutional demand for gold, as investors seek to diversify away from dollar-denominated assets.

Major Financial Institutions’ Gold Price Forecasts for 2026

HSBC: expects gold to reach $5,000 per ounce in the first half of 2026, with an annual average of $4,600, compared to a $3,455 average in 2025.

Bank of America: raised forecasts to $5,000 as a potential peak, with an expected average of $4,400, warning of possible short-term corrections.

Goldman Sachs: adjusted expectations to $4,900 per ounce, citing strong inflows into gold ETFs.

J.P. Morgan: predicts gold reaching $5,055 by mid-2026.

These forecasts converge around a range between $4,800 and $5,000 as a potential peak, with an expected average between $4,200 and $4,800.

Price Range and Correction Scenarios

Analyses warn of a possible correction toward $4,200 per ounce in the second half of 2026 if investors take profits. However, HSBC excludes a drop below $3,800 unless a major economic shock occurs.

Goldman Sachs indicated that sustained prices above $4,800 could test the market’s “price credibility.” J.P. Morgan and Deutsche Bank analysts agree that gold has entered a new price zone that is difficult to break downward, thanks to strategic shifts viewing it as a long-term asset.

Regional Outlook in the Middle East

Central banks in the Middle East increased their gold reserves, with the Central Bank of Egypt adding 1 ton and Qatar 3 tons in Q1 2025.

In Egypt: gold prices could reach around 522,580 EGP per ounce, a 158.46% increase according to CoinCodex forecasts.

In Saudi Arabia: if the ounce approaches $5,000, the price could be around 18,750 to 19,000 SAR.

In the UAE: under the same assumption, the price might reach approximately 18,375 to 19,000 AED per ounce.

These are approximate forecasts dependent on exchange rate stability and continued global demand.

Technical Indicators and Short-Term Trends

On November 21, 2025, gold closed at $4,065.01 after touching a peak of $4,381.44 on October 20. The price broke below the upward channel on the daily timeframe but remains attached to the main bullish trendline connecting lows around $4,050.

Strong support is seen at $4,000, and a clear daily close below this level could target the $3,800 (50% Fibonacci retracement) zone. On the upside, $4,200 is the first strong resistance level, and a break above it opens the way toward $4,400 and $4,680.

The RSI remains steady at 50, indicating market neutrality with balanced buying and selling pressures. The MACD stays above zero, confirming the overall bullish trend.

Technical analysis suggests that gold will continue trading within a sideways 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 and Future Outlook

All indicators point to gold prices in 2026 moving within a broad range combining potential gains and corrections. The current market dynamics appear to combine strong support factors (investment demand, central bank purchases, dollar weakness) and cautious factors (profit-taking expectations, potential price saturation).

If real yields continue to decline and the dollar remains weak, gold is poised to reach new record levels. Conversely, if inflation decreases and market confidence returns, the metal may enter a stabilization phase, preventing the achievement of the $5,000 target level.

In any case, monitoring global economic indicators and central bank monetary policies will be crucial in determining the actual path of gold prices in the coming year.