2026 Gold Price Forecast: When Will the Bull Market Under the Influence of the Five Major Driving Factors Come to an End

Gold price forecasts have always been a key focus for investors. Over the past two years, gold surged by 150%. After breaking through $2,000 at the start of 2024 and reaching over $5,000 per ounce by early 2026, the market is now pondering a core question: How far can this bull run go?

On the surface, rate cuts, inflation, and geopolitical risks have driven gold prices higher, but the deeper driver is the structural cracks in the global credit system. Central banks continue to increase gold holdings, while the proportion of dollar reserves declines, signaling a long-term shift in the international monetary system. This is not a short-term phenomenon but a crucial backdrop shaping gold’s outlook over the next decade.

Why Did Gold Surge 150%? Five Structural Drivers Explained

Since early 2024, gold prices have achieved their best performance in nearly 30 years. According to Reuters and Bloomberg data, the 2025 rally has exceeded 60%, reaching the highest levels since 2007 (which saw a 31% increase, followed by 29% in 2010). Into 2026, the strength continues, with prices remaining above $5,000 per ounce.

This bull market is driven by five mutually reinforcing structural factors:

First, ongoing trade protectionism and tariff policies create persistent uncertainty. Repeated tariff measures have heightened risk aversion, directly fueling the 2025 surge in gold prices. Historical experience shows that during trade wars (such as the US-China trade conflict in 2018), gold often gains 5-10% in short-term spikes amid policy uncertainty. As 2026 unfolds, the residual effects of tariffs and regional frictions remain key variables supporting gold.

Second, the gradual erosion of confidence in the US dollar shifts asset allocation logic. Growing US fiscal deficits, frequent debt ceiling debates, and the global de-dollarization trend lead capital to flow from dollar assets into hard assets. When confidence in the dollar wanes, gold—priced in dollars—tends to benefit, attracting more inflows. This is a long-term structural change, not just short-term volatility.

Third, the Federal Reserve’s rate-cutting pace directly influences gold’s appeal. Rate cuts weaken the dollar and reduce the opportunity cost of holding gold, both of which boost demand. Historically, each rate-cut cycle has seen significant gold price increases (e.g., 2008-2011, 2020-2022). Expectations of 1-2 more rate cuts in 2026 provide strong support. However, note that gold sometimes dips after rate cut announcements, often due to market pre-emptive adjustments or hawkish Fed speeches. Monitoring the CME FedWatch tool for rate cut probabilities is an effective way to gauge short-term price movements—rising probabilities tend to lift gold, while declining ones may lead to corrections.

Fourth, geopolitical risks sustain high demand for safe-haven assets. The ongoing Russia-Ukraine conflict, escalating Middle East tensions, and regional instability amplify global supply chain vulnerabilities. Geopolitical events often trigger sharp spikes in gold prices; this factor remains relevant through 2025-2026.

Fifth, central banks’ continued accumulation forms a new support base. According to the World Gold Council (WGC), in 2025, global net gold purchases by central banks exceeded 1,200 tons, marking the fourth consecutive year of net purchases over a thousand tons. Notably, 76% of surveyed central banks plan to “moderately or significantly increase” their gold holdings over the next five years, with most expecting their dollar reserve ratios to decline. This reflects a long-term skepticism toward the dollar-based system, indicating a structural shift.

Will Gold Peak in 2026 or Continue Climbing?

Beyond these five core drivers, several additional factors support further gains. Global debt has reached $307 trillion (IMF data), and high debt levels limit monetary policy flexibility, likely favoring easing measures that indirectly boost gold’s appeal. Stock markets are at historic highs with limited leadership, increasing portfolio concentration risks, prompting many to allocate to gold for stability.

Media coverage and social sentiment also drive short-term capital inflows. Continuous news and social hype lead to large-scale, cost-agnostic investments into gold markets. The popularity of trading instruments like XAU/USD allows investors to dynamically adjust positions rather than lock in long-term holdings, increasing market liquidity and responsiveness but also heightening volatility.

However, gold’s rally is not a straight line. In 2025, expectations of Fed policy shifts caused a 10-15% correction. If real interest rates rebound or crises ease in 2026, sharp fluctuations are possible. The average annual volatility of gold is about 19.4%, higher than the S&P 500’s 14.7%, indicating significant short-term swings.

Strategies for Different Investors: From Retail to Institutions

Experienced short-term traders can find ample opportunities amid volatility. Liquidity is high, and short-term price movements are easier to interpret, especially during sharp rises or falls where bullish or bearish momentum becomes clear. Seasoned traders can ride the wave effectively.

Newcomers aiming to capitalize on short-term swings should start small and avoid overleveraging. Emotional discipline is crucial—panic selling can lead to significant losses. Using economic calendars to track US economic data helps inform trading decisions.

Long-term physical gold investors should be prepared for substantial fluctuations. While the long-term trend remains upward, enduring volatility requires mental resilience. Physical gold involves higher transaction costs (typically 5-20%).

Portfolio allocators can include gold, but should remember its higher volatility compared to stocks. Diversification remains key—placing all assets into gold is unwise.

For maximizing returns, some investors may hold long-term positions while trading short-term swings, especially around major US economic data releases. This approach demands experience and risk management skills.

Gold’s cycle is very long. Investing as a hedge over a decade or more can be rewarding, with potential doubling or halving within that period. For Taiwanese investors, currency fluctuations (USD/TWD) also impact returns when denominated in foreign currency.

How Do Global Banks View Gold’s 2026 Outlook?

As of late January 2026, spot gold (XAU/USD) has repeatedly hit new highs above $5,150–$5,200 per ounce. Year-to-date, after a 60%+ gain in 2025, prices have risen another 18-20%, with no signs of weakening.

Analysts are generally optimistic about the remainder of 2026. The consensus is that, driven by the same structural factors fueling the bull market, gold will continue to rise:

• Average price forecast: $5,200–$5,600 per ounce
• Year-end target: typically $5,400–$5,800, with more optimistic estimates reaching $6,000–$6,500
• High-end scenarios: geopolitical escalation or significant dollar depreciation could push prices above $6,500

Major institutional forecasts (as of late January 2026):

Goldman Sachs raised its year-end target from $5,400 to $5,700, citing ongoing central bank buying and declining real yields. JPMorgan expects about $5,550 by Q4, supported by ETF inflows and safe-haven demand. Citigroup’s average forecast for H2 is $5,800, with risks of rising to $6,200 in recession or high-inflation scenarios.

UBS remains more conservative, with a target of $5,300, but admits that accelerated rate cuts could make this too low. The annual average price from WGC and LBMA participants is around $5,450, significantly higher than previous surveys.

Risks and Opportunities in Gold’s Forecast

Since the surge in central bank gold purchases began in 2022, the trend shows no signs of stopping. Central bank accumulation reflects long-term doubts about the dollar system, and this trend is unlikely to reverse in 2026 amid persistent inflation, debt pressures, and geopolitical tensions.

Gold’s bottom is rising, with limited downside in bear markets and strong momentum in bull markets. However, the key is whether you have a systematic approach to monitor the market rather than chasing headlines.

In the short term, escalating trade tensions, policy shifts, and geopolitical shocks can cause sharp swings. If real interest rates rebound or international crises ease, gold may face corrections. But in the long run, as long as structural issues in the dollar system persist and central bank buying continues, gold remains supported by a long-term upward trend.

Investors should recognize that gold is not a get-rich-quick tool but a defensive asset in asset allocation. Whether trading short-term or holding long-term, the real value of gold forecasts lies in helping you make rational decisions aligned with your risk tolerance, rather than blindly chasing gains or panicking during downturns.