UPDATE: Gold prices have broken through the significant barrier of $4,500 per ounce, marking a historic moment in the market. As of Wednesday, the spot price reached around $4,490 during trading in Asia, continuing a remarkable rally that has seen gold gain over 70% this year—the best performance since 1979. Analysts predict that this bull run will extend well into 2026, even in the absence of a major financial crisis.
The surge in gold prices is being fueled by a weaker US dollar, persistent policy uncertainty, and strong demand from central banks. According to Farah Mourad, a market analyst at IG, “Gold doesn’t need a crisis to rise in 2026. It simply needs the world to behave the way it has been: elevated debt, policy uncertainty, fragile alliances, and a dollar that no longer dominates as it once did.” This perspective suggests that gold is absorbing market tensions rather than merely reacting to them.
Gold’s rally is underpinned by structural factors rather than temporary spikes. Major banks forecast that gold could trade within the range of $4,500 to $4,700 per ounce next year, with the potential to reach $5,000 if current macroeconomic conditions persist. Analysts highlight that monetary policy may also support gold prices, particularly as inflation remains stubborn and economic growth shows signs of unevenness.
As interest rates are expected to decline, the opportunity cost of holding non-yielding assets like gold decreases, making it more attractive to investors. However, risks remain. A stronger rebound in the US dollar or a shift toward risk-on sentiment could hinder gold’s advance. Despite this, investor positioning in gold is balanced, suggesting the market is not yet overcrowded, according to Mourad.
In a similar vein, Ewa Manthey, a commodities strategist at ING, anticipates that gold prices will continue to set record highs in 2026. She noted that the potential appointment of a Federal Reserve chair who favors lower interest rates could further bolster gold’s standing. “We expect the downside to be limited as any weakness will likely attract renewed interest from both retail and institutional buyers,” Manthey stated.
Wall Street giant Goldman Sachs has also chimed in, predicting that gold could climb to $4,900 per ounce by December 2026. This stellar performance in gold has also driven gains in other precious metals. Spot silver is trading approximately 147% higher year-to-date at around $72 per ounce, while platinum has surged to about $2,342 per ounce, reflecting a 159% increase this year.
Stay tuned as these developments unfold, and keep an eye on gold prices as they continue to break records and reshape the market landscape. The implications for investors and the broader economy are significant, making it crucial to remain informed on this rapidly evolving situation.
