Can gold prices in 2026 break through $5,600 to reach a new high?

Investing.com - The sharp fluctuations in gold prices earlier this year have raised questions in the market about whether this precious metal can regain its upward momentum, but UBS analysts believe that the forces driving its early gains still exist.

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After reaching a historical high of $5,594 per ounce on January 29, gold prices plummeted 9% the next day, sliding to an intraday low of $4,400, UBS strategist Vincent Heaney said, describing this move as “unsettling for investors.”

Subsequently, prices stabilized below $5,000, fluctuating between bargain buying and changing expectations for Federal Reserve interest rate hikes.

UBS believes that recent volatility should be viewed more as a “reset rather than a regime change,” and notes that spot prices are still expected to rise about 15% by 2026.

The bank considers the $4,500 to $4,800 range as an area where “fundamentals will regain influence,” supported by this year’s expectation of two more rate cuts in the U.S. and sustained strong demand from central banks and ETFs.

Evidence of this demand remains robust. UBS emphasizes that central banks purchased 863 tons of gold in 2025, with forecasts for 2026 purchases reaching 950 tons. ETF inflows are also expected to increase to 825 tons.

The bank believes that volatility may mirror mid-cycle corrections seen in past cycles, such as in 1974 and 2020, when prices declined but quickly resumed their upward trend.

UBS remains confident in gold’s rise through 2026, expecting prices to reach as high as $6,200 per ounce by mid-year, then consolidate around $5,900 in December.

The bank recommends investors allocate a “single-digit percentage” of their portfolio to gold to hedge against inflation and geopolitical risks.

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