In 2025, gold prices recorded their biggest annual gain since the 1979 oil crisis. Over the past two years, gold has doubled—a type of move that in previous cycles would have led many to predict a sharp correction.
However, an ever-expanding investor base, together with multiple factors ranging from U.S. policy to the Russia–Ukraine war, has led advisory institutions including JPMorgan and Bank of America to forecast that gold could reach $5,000 per ounce in 2026.
Driven by demand from central banks and investors, spot gold climbed to a record high of $4,381 in October. Before March of this year, gold had never broken above the $3,000 level. New entrants include stablecoin issuers as well as corporate treasury departments.
Bank of America says expectations of further price gains and the need for portfolio diversification are fueling buying. Meanwhile, the U.S. fiscal deficit, measures aimed at narrowing the U.S. current-account deficit, and a weak-dollar policy are providing momentum for this trend.
Concerns about the Federal Reserve’s independence, tariff disputes, and geopolitical factors—including the Russia–Ukraine war and interactions between Russia and European NATO countries—are also providing additional support for gold.
For a fifth consecutive year, central banks have been diversifying foreign-exchange reserves away from U.S. dollar assets, a trend expected to underpin the gold market into 2026. When investor positioning is tight, capital rotates, and prices dip, central banks often step in to buy. According to the World Gold Council, global central banks purchased 634 tonnes of gold in the first nine months of this year.
From a positioning perspective, the market backdrop has become clearer, and gold holding above $4,000 creates conditions for the uptrend to continue. This is also seen as a signal that after reducing risk, investors are beginning to add to positions again.
Market interpretation:
On the 4-hour chart, gold is moving sideways. The MACD lines and histogram remain above the zero line but are contracting. The share of gold in investors’ total assets under management has risen from 1.5% pre-2022 to 2.8%. Although this is a high level, it may not be the ceiling. However, the market also expects central bank purchases and inflows into gold ETFs to slow somewhat next year.
