Is gold still worth buying now? Investment opportunities and risk analysis for 2026

If you’ve recently heard news about gold reaching a record high, you might ask: Is it still a good time to buy gold? There’s no absolute answer, but we can analyze from three perspectives: driving forces, timing, and risks. The 150% cumulative increase has already attracted a lot of attention, but the real reasons to buy are much more complex than headlines suggest.

What caused this gold bull market?

At the start of 2024, gold was just over $2,000 per ounce, and this year it broke through $5,000. This isn’t just about price swings; it reflects changes in the global financial structure. According to Reuters and Bloomberg data, the gold price has increased over 30% in 2024-2025, hitting the highest level in nearly 30 years, far surpassing the 31% in 2007 and 29% in 2010. Behind this rally are five core drivers reinforcing each other.

First, trade protectionism has opened the door to uncertainty. Continuous tariffs have heightened risk aversion, directly pushing up gold prices. Historically, during the US-China trade war in 2018, gold often saw short-term gains of 5–10% amid policy uncertainty. As of 2026, the effects of tariffs linger, and regional trade frictions persist, remaining key variables supporting gold prices.

Second, confidence in the US dollar is gradually declining. The US fiscal deficit is widening, debt ceiling debates are frequent, and the global trend of de-dollarization continues. Funds are shifting from dollar assets to hard assets. IMF data shows global debt reaching $307 trillion in 2025–2026, indicating long-term pressure on the dollar, which benefits gold as a dollar-denominated asset.

Third, expectations of Federal Reserve rate cuts provide direct support. Lower interest rates weaken the dollar, reducing the opportunity cost of holding gold, making it more attractive. Every rate-cut cycle has seen significant gold price increases—2008–2011 and 2020–2022 are prime examples. If the economy weakens, rate cuts could accelerate, further supporting gold. However, sometimes rate cut announcements don’t lead to immediate rises—in fact, prices may fall if markets have already priced in the expectations or if Fed hawkishness prevails. Monitoring CME FedWatch probabilities helps gauge short-term trends—rising probabilities suggest gold may go up; falling probabilities could lead to corrections.

Fourth, geopolitical risks keep safe-haven demand high. The ongoing Russia-Ukraine conflict, escalating Middle East tensions, and regional instability make gold a portfolio insurance. Geopolitical events often cause short-term spikes in gold prices. In 2025–2026, these risks remain, amplified by fragile global supply chains.

Fifth, central banks’ continued gold accumulation provides structural support. According to the World Gold Council (WGC), in 2025, global central banks net purchased over 1,200 tons of gold, marking the fourth consecutive year of net purchases exceeding 1,000 tons. The 2025 central bank reserve survey shows most (76%) expect their gold holdings to increase moderately or significantly over the next five years, while many anticipate reducing dollar reserves. This isn’t short-term speculation but a long-term structural shift questioning the US dollar system.

What mindset should you have when entering gold now?

After understanding the drivers, the key question is: Is it suitable to buy gold now? The answer depends on your investor profile.

If you are an experienced short-term trader, this volatile market offers great opportunities. Liquidity is good, and short-term price directions are easier to judge—especially during sharp rises or falls, where momentum is clear. Skilled traders can ride the waves for gains.

If you are a novice investor looking to capitalize on recent volatility, remember three disciplines: start small, don’t blindly add positions, and avoid emotional trading that could wipe out your capital. Using economic calendars to track US economic data can help inform your decisions.

If you want to buy physical gold for long-term holding, be prepared psychologically. Gold’s average annual volatility is 19.4%, higher than the S&P 500’s 14.7%. While the long-term trend is upward, you must be able to tolerate significant fluctuations. Gold’s cycle is long—buying as a hedge over 10+ years can pay off, but returns may double or halve within that period. Also, physical gold has higher transaction costs—generally 5–20%—which eat into your gains.

If you want to allocate gold in your portfolio, it’s fine, but don’t forget that gold’s volatility isn’t lower than stocks. Putting all your assets into gold isn’t wise. Diversification remains the safer approach, with gold serving as a hedge.

If you aim for maximum gains and are comfortable with longer-term holding, you can also try short-term trading around major data releases, especially when volatility spikes. This requires experience and risk management skills. Remember, gold prices never move in a straight line. In 2025, Fed policy expectations caused a 10–15% correction; in 2026, if real interest rates rebound or crises ease, volatility will continue. The key is having a systematic approach to monitor the market, not just chasing headlines.

For investors in Taiwan, currency fluctuations between USD and TWD also impact returns when priced in foreign currency.

What is the outlook for gold prices in 2026?

As we enter the second month of 2026, spot gold (XAU/USD) has repeatedly hit new highs this month, staying above $5,150–$5,200 per ounce. Most analysts remain optimistic about the rest of 2026, believing that the same structural factors driving the bull market over the past two years will continue to push prices higher.

Market consensus forecast — average price in 2026: $5,200–$5,600 per ounce (many institutions have raised previous estimates).

• Year-end target: typically $5,400–$5,800, with some more optimistic forecasts reaching $6,000–$6,500.
• Extreme high-end: some institutions, including Societe Generale and independent strategists, suggest that if geopolitical risks escalate or the dollar depreciates sharply, prices could exceed $6,500.

Major bank forecasts (latest as of late January):

Goldman Sachs raised its year-end target from $5,400 to $5,700, citing ongoing central bank purchases and declining real yields. JPMorgan expects around $5,550 in Q4, driven by ETF inflows and safe-haven demand. Citibank’s mid-year average is around $5,800, with risks of rising to $6,200 if recession fears or inflation persist. UBS is more conservative, with a year-end target of $5,300 but acknowledges that faster rate cuts could push prices higher. WGC and LBMA data show the average price participants expect for 2026 has risen significantly, around $5,450, reflecting bullish sentiment.

Is now a good time to buy gold? Final advice

The core takeaway: It’s still possible to buy gold now, but there’s no free lunch.

This bull market appears driven by rate cuts, inflation, and geopolitical risks, but deeper down, it’s rooted in cracks within the global credit system. Gold acts as a long-term hedge against systemic risks. Since the surge in central bank gold buying began in 2022, the trend hasn’t stopped, signaling long-term doubts about the US dollar system.

This trend won’t suddenly disappear in 2026, as inflation remains sticky, debt pressures persist, and geopolitical tensions continue. Gold’s bottom is rising, with limited downside in a bear market and strong momentum in a bull. But remember, gold’s rise is never linear. Short-term trade tensions easing, policy expectations shifting, or risk sentiment turning can all cause corrections.

Ultimately: You can buy gold now, but how you do it matters. It’s not just about “buy or not,” but “how, how much, and based on what risk tolerance.” Beginners often make the mistake of chasing the rally blindly, overleveraging, or not understanding their risk capacity. Instead of asking “Can I buy now?”, ask yourself: “Why am I buying gold?”, “How much fluctuation can I handle?”, and “What is my investment horizon?” Clarifying these questions will make your decision to buy gold more natural and confident.

Disclaimer: The above is for market analysis purposes and does not constitute investment advice. Investment decisions should be based on individual risk tolerance and goals. Past performance does not guarantee future results.