Gold in 2026: Will it break the $5000 barrier?

Gold prices surged sharply in 2025, reaching $4,381 per ounce in October before retreating to the $4,000 range, raising questions about the upcoming price trajectory. These movements are not random but reflect a complex interaction of multiple economic and geopolitical factors shaping the future of this precious metal.

Central Banks: The Main Driver Behind Gold’s Rise

Global central banks added 244 tons of gold in Q1 2025, a rate exceeding the historical average by 24%. More importantly, 44% of central banks worldwide now hold gold reserves, up from 37% in 2024, reflecting a strategic shift toward diversification away from the dollar.

China led the expansion with an addition of over 65 tons, while Turkey increased its reserves to 600 tons. The World Gold Council expects this trend to continue through the end of 2026, especially in emerging markets seeking to protect their currencies from exchange rate volatility. This ongoing institutional demand provides fundamental support for rising prices.

Limited Supply Tightens the Gap

Despite reaching an all-time high of 856 tons in Q1 2025 (, this modest annual growth of 1% does not keep pace with rising demand. The issue is compounded by a 1% decline in recycled gold, as owners prefer to hold onto their holdings in anticipation of further increases.

Cost issues add another layer of pressure: global extraction costs rose to $1470 per ounce in mid-2025, the highest in a decade, constraining producers’ ability to increase output. This structural supply shortage enhances the likelihood of breaking through new price levels.

The Federal Reserve: Rate Cuts Support Gold Demand

The US Federal Reserve cut interest rates by 25 basis points in October 2025 to a range of 3.75-4.00%, with market expectations of an additional 25 basis point cut in December. According to BlackRock reports, the Fed may target a rate of 3.4% by the end of 2026 in a moderate scenario.

Every rate cut reduces the opportunity cost of holding gold as a non-yielding asset and boosts its appeal relative to bonds. US 10-year bond yields fell from 4.6% to 4.07% during 2025, supporting the positive gold equation.

Safe-Haven Assets Attract Capital

Gold exchange-traded funds (ETFs) experienced record inflows, with assets under management rising to $472 billion and holdings reaching 3838 tons, close to the all-time peak of 3929 tons. Individual investors added 28% of their holdings in gold to their portfolios in 2025, driven by fears of economic instability.

Geopolitical Tensions Fuel Demand

Geopolitical uncertainty increased demand for gold by 7% annually. Trade conflicts between Washington and Beijing, along with Middle East tensions, prompted large funds to seek safe havens. When Taiwan Strait fears escalated in July, prices jumped above $3400, continuing sharply as risks resurfaced.

Weak Dollar Boosts External Demand

The dollar index declined by 7.64% from its peak at the start of 2025, encouraging foreign investors to increase their gold positions. Bank of America analysts see this weakness, combined with stable real yields around 1.2%, potentially placing gold in a sustainable upward range through 2026.

Analysts’ Outlook: One Direction

Major investment banks unanimously forecast strong bullish trends:

• HSBC: expects gold to reach $5000 in the first half of 2026, with an annual average of $4600
• Bank of America: raises the forecast to $5000 with an average of $4400, but warns of a short-term correction
• Goldman Sachs: adjusts its forecast to $4900 per ounce
• J.P. Morgan: expects the price to hit $5055 by mid-2026

The most common range among analysts is between $4800 and $5000 as a peak, with an average annual price between $4200 and $4800.

Middle East Scenarios

In Egypt, CoinCodex forecasts suggest gold could reach 522,580 Egyptian pounds per ounce, a 158% increase over current prices.

For Saudi Arabia and the UAE, if gold prices approach $5000 globally )the optimistic scenario(, this could translate to approximately 18750-19000 SAR and 18375-19000 AED per ounce, assuming exchange rates remain stable.

Risks and Potential Corrections

HSBC warns of a possible loss of momentum in the second half of 2026, with a correction toward $4200 as profits are taken, but rules out a decline below $3800 unless a major economic shock occurs.

Goldman Sachs indicates that staying above $4800 puts the market to a “price credibility test,” meaning a challenge to whether gold can sustain these levels.

However, 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 rather than a short-term speculative tool.

Technical Analysis: Neutral but Positive Outlook

Gold closed on November 21, 2025, at $4065, after approaching $4381 in October. The price broke the upward channel line but remains above the main trendline, with strong support at $4000.

The RSI indicator stabilized at 50, indicating a fully neutral market, while the MACD remains above zero, confirming the overall bullish trend. Technical analysis suggests continued trading within the $4000-$4220 range in the near term, maintaining a positive outlook as long as the price stays above the main trendline.

Summary: 2026, The Year of Testing

Gold price forecasts for 2026 depend on a delicate balance: will central banks continue buying and real yields weaken? Or will confidence return to traditional financial markets?

If real yields keep declining and the dollar remains weak, gold is poised to hit new record highs approaching $5000. Conversely, if inflation recedes and markets regain confidence, the metal may enter a long-term stabilization phase, potentially preventing the achievement of these ambitious levels.