Will gold decrease in 2026? Gold forecasts indicate record levels or an inevitable correction?

As gold prices reach new thresholds in 2025, the pressing question for investors is: Will gold really decline in 2026, or will the rally continue? The answer isn’t simple; gold forecasts for the coming year depend on a delicate balance of many factors, some supporting further gains, others potentially pushing prices downward.

What happened to gold in 2025?

Gold experienced an exceptional journey in 2025, touching record levels exceeding $4300 per ounce in October, but then retreating near $4000 by November. This volatility revealed a state of confusion among investors regarding the true market direction, and whether the recorded peaks indicate ongoing upward momentum or a warning sign of an upcoming correction.

Official data from the World Gold Council showed that total demand for the yellow metal in the first half of 2025 reached record levels, with investment demand alone hitting 1249 tons in Q2. Exchange-traded gold funds absorbed massive inflows, pushing assets under management to $472 billion, reflecting strong institutional investor confidence in the precious commodity.

Factors supporting continued gold price increases

Growing demand from central banks

Central banks worldwide added 244 tons of gold in Q1 2025 alone, a 24% increase over the historical average. China continued its buying streak for the twenty-second consecutive month, while Turkey increased its reserves to over 600 tons. This strong demand from monetary authorities reflects a growing desire to diversify away from the US dollar, a trend expected to persist throughout 2026.

Supply and demand gap

Despite record mineral production levels of 856 tons in Q1 2025, this still isn’t enough to close the gap with rising demand. More importantly, extraction costs have risen to $1470 per ounce, the highest in a decade, limiting production expansion. Additionally, gold bar holders prefer to hold onto their assets amid bullish expectations, reducing recycled gold supply and deepening market scarcity.

Loose monetary policy

The US Federal Reserve cut interest rates by 25 basis points in October 2025, with markets pricing in further cuts by the end of December. BlackRock’s forecasts suggest the possibility of rates reaching 3.4% by the end of 2026. This decline in real yields reduces the opportunity cost of holding gold, increasing its attractiveness to investors.

Geopolitical tensions

Ongoing trade conflicts among major powers, along with regional tensions, have prompted investors to hedge their portfolios by buying gold. Reports indicate that geopolitical uncertainty alone increased gold demand by 7% in 2025, a trend that could accelerate in 2026 if crises intensify.

Weak dollar and declining yields

The dollar index fell by 7.64% from its peak in early 2025, while 10-year US Treasury yields dropped from 4.6% to 4.07%. This combination enhances gold’s appeal to foreign investors and encourages investment funds to shift toward non-dollar assets.

Gold forecasts 2026: Will it stay rising?

Based on analyses from leading global investment banks, gold price forecasts for 2026 generally point to bullish scenarios:

HSBC Bank forecast: Expect reaching $5000 per ounce in the first half of 2026, with an average for the year around $4600.

Bank of America forecast: Raising its target to $5000 as a potential peak with an average of $4400, but warning of a short-term correction.

Goldman Sachs forecast: Adjusted upward to $4900 per ounce, supported by ETF inflows and central bank buying.

J.P. Morgan forecast: Anticipates reaching about $5055 by mid-2026.

The most common range among analysts is between $4800 and $5000 as a peak and $4200 to $4800 as an average.

Will gold really fall? Risks and expected corrections

Despite optimism, some indicators warn of a possible downward correction in 2026:

Profit-taking scenario

HSBC warned that the upward momentum might weaken in the second half of 2026, with potential correction toward $4200 per ounce. However, a sharper decline below $3800 is unlikely unless a deep economic shock occurs.

Price credibility test

Goldman Sachs indicated that sustained prices above $4800 could test the market’s demand sustainability, especially with weakening industrial demand for gold.

But technical analysis does not support a sharp bearish scenario

J.P. Morgan and Deutsche Bank analysts agree that gold has entered a new “difficult-to-break” price zone downward, thanks to a strategic shift in investor perception of gold as a long-term asset rather than a short-term speculative tool.

Technical picture of gold: What do the charts tell us?

According to the latest data from November 21, 2025, gold closed at $4065 per ounce, after reaching a historical high of $4381 on October 20. The price broke short-term ascending channel lines but still maintains the main upward trend line.

Critical levels:

• Major support: $4000 (A decisive break)
• If this level is broken with a clear daily close, the target could be $3800 (50% Fibonacci retracement)
• First resistance: $4200
• Second resistance: $4400
• Third resistance: $4680

Momentum indicators: The RSI (RSI) remains at 50, indicating a neutral state between buying and selling. The MACD still supports the overall bullish trend.

The technical outlook suggests continued sideways trading within a mildly upward range between $4000 and $4220 in the near term, with the overall picture remaining positive as long as the price stays above the main trend line.

Gold outlook in the Middle East region

The region has seen a notable increase in central bank reserves, especially the Central Bank of Egypt and Qatar.

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

In Saudi Arabia and the UAE: If the ambitious scenario of $5000 per ounce materializes, it could translate to around 18,750 to 19,000 SAR, and about 18,375 to 19,000 AED.

However, it’s important to note that these forecasts assume stable exchange rates and continued global demand without major economic shocks.

Summary: Will gold decline or rise in 2026?

Gold forecasts strongly lean toward continued growth in 2026, especially if real yields remain low and the dollar stays weak. The primary scenario suggests reaching new highs near $5000 in the first half of the year.

But will gold fall? Yes, but limited. Corrections of 8-10% down to around $4200 are very possible, especially in mid-2026 if investors start taking profits. However, a sharp collapse below $3800 would require a major economic shock or a radical change in global monetary policy.

Investors expecting a big fall may be disappointed, while those monitoring prices near $4000-$4200 could find good buying opportunities to resume the rally. The key is to watch inflation data and Federal Reserve monetary decisions, as they will be the real determinants of gold’s direction in the coming months.