Gold prices are on track to close out the year with a strong increase
Gold is on track to close the year with a gain of about 60%, its best annual gain since 1979.
Rajat Bhattacharya - senior investment strategist at Standard Chartered - said in the 2026 outlook report that this is the second consecutive year that gold has outperformed both stocks and bonds, and has outperformed bonds for the 10th consecutive year.
The record rally in gold, driven by geopolitical uncertainty and concerns about global fiscal policy easing, has boosted gold prices by more than 50% this year and more than 150% over the past three years. We strongly believe that gold will continue to outperform global stocks and bonds in 2026, he said.
Despite expectations of a favorable market to support gold prices in 2026, analysts are also trying to cool down the excessive optimism.
Bhattacharya predicts gold prices will average $4,500/ounce in the next 12 months.
While gold appears expensive in some measurements, strategic factors and cycles show that the current technical correction is an opportunity for investors lacking in gold allocation to increase their proportion to achieve desired targets. Our balanced asset allocation strategy is to reserve 7% for gold, he said.
At the same time, more and more experts believe that gold prices could reach the 5,000 USD/ounce mark next year. However, this is only equivalent to an increase of 16%, much lower than the increase this year and 27% in 2024.
Carsten Fritsch - commodity analyst at Commerzbank - noted that gold prices have doubled since February 2024 and said that the current pace is not sustainable. The German bank expects gold to rise to $4,400 an ounce next year.
Chantelle Schieven, research director at Capitalight Research, remains optimistic about gold through 2026, but believes it is necessary to question the trajectory and upside momentum.
2026 prospects
Gold has had two very good years, so it is completely reasonable to question whether this momentum can last, Schieven said. Gold may be in the bubble zone, but that does not mean it will burst next year. We continue to see a constructive shift in the global financial system, supporting higher gold prices in the long term. I think we can see $5,000/ounce in 2026".
She added that one reason she remains optimistic about is the technical developments of prices forming increasingly high support zones. After holding above $2,000/ounce for the whole year of 2024, gold set a new support of $2,500 at the beginning of the year, then quickly increased to $2,800. By the summer, prices formed a new support zone in the range of 3,000-3,500 USD, becoming the launching pad for the historical peak of 4,366 USD/ounce in October.
In an interview with Kitco News, Aakash doshi, chief gold strategist at State Street Investment Management, said he predicted that gold prices will move sideways in the 4,400-4,500 USD/ounce range next year, but the risk is still leaning towards the upward direction.
Its clear that $3,000 has become a new $2,000/ounce mark, and now were starting to see $4,000/ounce as a new $3,000/ounce mark. With such a strong support zone, I think the next 25% increase in gold will be to go up, not down" - he said.
An important reason why the majority of analysts remain optimistic is the almost unchanged global context.
At the annual outlook conference, Michael Widmer, head of metals research at Bank of America, said that gold's price increases often only end when initial foundational factors weaken, not simply because prices have risen.
Bank of America's official forecast shows that gold prices will average $4,538/ounce, peaking at $5,000/ounce.
