Gold Price Predictions for 2026: Will the Rally Continue?
Over the past 50 years, the stock market has produced the highest annual returns of any asset class. But that was not the case in 2025.
Instead, precious metals stood out, gold gained more than 64% amid the country’s turmoil, the US recession, the weak dollar and the Federal Reserve’s rate-cutting cycle. Those macroeconomic conditions led to aggressive central bank purchases while also fueling a frenzy for exchange-traded funds (ETFs) backed by physical gold.
In the same period, the S&P 500 gained 16.39% – above its historical average but trailing gold significantly – four of the Magnificent Seven underperformed the benchmark index.
The result was a halt in the yellow metal to more than 50 records this year as stocks came under pressure from concerns about historically high valuations and the emerging AI bubble.
Looking ahead to 2026, investors exposed to gold can expect another strong year of gains, as many of the factors that have driven the precious metal this year are likely to continue.
What is driving the bullish gold outlook for 2026
Much of gold’s record performance this year can be attributed to what Peter Klein, founder and chief investment officer at ALINE Wealth Management, refers to as the three horsemen: continued inflationary pressures, the precious metal’s underperformance before 2025 and rising global debt.
Going forward, Klein says he is optimistic about gold as consumer prices continue to rise. “I still believe we’re going to be surprised or we’re going to be surprised by the idea of sticky inflation, which is a second wave,” he said, referring to the expected resurgence in inflation.
That’s what Fed Chairman Jerome Powell touched on in his comments following the December meeting after the central bank’s third and final interest rate cut in 2025.
Inflation was mentioned 79 times during the news conference, where Powell specifically attributed the rising costs of President Donald Trump’s trade policies.
“Inflation in goods has increased, which shows the effects of the tax,” he said. “In the near term, inflation risks are tilted to the upside.”
While expectations of further interest rate cuts in early 2026 remain low, inflation may once again act as a catalyst for gold prices. When inflation erodes the purchasing power of fiat money, investors have historically turned to the precious metal as a safe haven and store of value.
That happened in 2025 as the US dollar depreciated more than 10% from its year-to-date high in Jan. 13. From that day forward, the price of gold increased by 63%.
The growing popularity of ETFs, which reached record highs in assets held in 2025, could also play a big role in gold’s performance next year.
“ETFs were where the money was going,” Klein said. “Gold ETFs have found great demand.” That demand was nine times what it was the year before, he adds.
Precious metal analysts cite ETF demand as one of the main drivers of gold prices over the past year, and one they expect to continue into the new year. JP Morgan Global Research predicts continued investor demand for gold, with around 250 tonnes (about 551,000 pounds) of inflows into ETFs expected by 2026.
Another driver of the precious metal – according to Gregory Shearer, head of Base and Precious Metals Strategy at JP Morgan – continues the central bank’s demand for gold, which is expected to remain high next year as evidenced by strong purchases in the third quarter of 2025 despite record-high gold prices.
Why investment banks are cautiously optimistic about gold
The general consensus is that gold is in line for another strong year. But Klein cautions investors to moderate their expectations for gold’s performance in 2026, pointing out that “gold has had a very good run. [in 2025].”
His year-end price targets fall in the $4,800 to $4,900 range. Klein’s estimate is in line with Goldman Sachs, which sees gold reaching $4,900 per troy ounce by the end of 2026, and Morgan Stanley’s estimate of $4,800, with the latter citing strong Chinese retail demand, central bank purchases and global growth concerns as positive factors.
JP Morgan is a great host.
“Gold demand will have enough firepower to continue pushing prices towards $5,000 per [troy] ounce in 2026,” Shearer said. That figure is the same as Bank of America’s 2026 price target, which suggests a potential upside of 14.34% from today’s price.
However, Shearer admits that the estimate may be biased, noting that JP Morgan has set a scenario based on foreign inflows into gold that could create enough new demand to drive prices to $6,000 per troy ounce, or 37.21% above the precious metal’s current price.
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