Investment banks have adjusted their outlooks accordingly. Union Bancaire PrivĂ©e (UBP) expects gold to âenjoy another strong year,â projecting a year-end price of $5,200 an ounce as both institutional and retail demand remain robust. Goldman Sachs recently raised its December 2026 forecast to $5,400 an ounce, up from $4,900, noting that hedges against policy and fiscal risks have become âstickyâ rather than transitory.
Data from the World Gold Council show that during past periods of elevated geopolitical stress, gold often outperformed other haven assets such as U.S. Treasurys and the Japanese yen. The council attributes the pattern to goldâs lack of credit risk, global liquidity, and role as a reserve asset.
Central banks accelerate diversification
Official-sector purchases offer an additional pillar of support. Goldman estimates that central banks are now buying an average of 60 tonnes per month, far above the 17-tonne pace observed before 2022. The bulk of those inflows stems from emerging-market institutions seeking to diversify reserves away from the U.S. dollar and other major currencies.
Persistent buying by monetary authorities is significant because the flow is typically slow to reverse, providing a steady source of demand even when investor sentiment cools. Strategists argue that this layer of official support is likely to remain in place as long as concerns over fiscal sustainability in advanced economies linger.
Geopolitical flashpoints stoke risk aversion
The geopolitical backdrop has grown more complex in recent weeks. Tensions surrounding resource exploration rights in Greenland escalated after competing claims from regional governments, raising questions about Arctic shipping lanes and rare-earth mining concessions. In Venezuela, a standoff between the Caracas government and opposition leaders continues to create uncertainty over the nationâs vast oil reserves. Meanwhile, sporadic hostilities in the Middle East have kept energy markets on edge, contributing to broader risk aversion in global financial markets.
HSBC told clients that âgeoeconomic issues related to Greenlandâ have delivered an additional spark for precious-metal prices, reinforcing the metalâs role as a protective asset when conventional risk metrics become difficult to gauge.
Macro-policy risks add to momentum
Beyond geopolitics, investors are grappling with questions about the sustainability of public finances in several large economies. Elevated debt levels, widening fiscal deficits, and shifting monetary-policy stances have combined to erode confidence in sovereign balance sheets. According to Goldman, these macro-policy concerns differ from event-driven hedgesâsuch as those placed ahead of the 2024 U.S. electionâbecause they are less likely to dissipate quickly.
The bank argues that worry over rising debt burdens and potential currency debasement âeffectively lifts the starting pointâ for bullion, placing a higher floor under prices than existed earlier in the decade. As a result, even modest bouts of profit-taking have failed to push spot prices meaningfully below key technical support levels.
ETF inflows underscore institutional interest
The reversal in Western ETF holdings marks a notable shift from the outflows observed during 2022 and 2023. Asset managers attribute the turnaround to a perception that real interest rates will remain subdued despite nominal rate increases by major central banks. With inflation expectations still elevated relative to pre-pandemic norms, the opportunity cost of holding goldâan asset that yields no couponâappears less onerous to portfolio managers.
Trading desks also highlight increased activity in call options, a sign that investors are positioning for further upside while limiting downside exposure. Rising implied volatility in the options market suggests that traders expect larger price swings ahead, potentially adding more momentum if spot prices breach new technical targets.
Outlook: drivers likely to persist
Forecasts diverge on how far the rally can extend, but most analysts agree that the pillars currently supporting goldâgeopolitical anxiety, fiscal uncertainty, and central-bank diversificationâshow few signs of receding in the near term. While a sudden de-escalation in global tensions or a marked improvement in sovereign fiscal metrics could temper demand, neither development appears imminent.
UBPâs base-case scenario envisions prices ending the year near $5,200 an ounce, underpinned by steady retail coin and bar sales. Goldmanâs longer-term projection of $5,400 by December 2026 assumes that macro-policy hedges remain intact and that central-bank purchases continue at the recent elevated pace.
For now, market participants will watch whether bullion can consolidate above the symbolic $5,000 mark or whether profit-taking offers a temporary pause. Even if a short-term pullback emerges, strategists note that the metalâs multi-faceted demand profileâspanning ETFs, wealthy families, and official institutionsâcreates a resilient foundation that was absent in earlier rallies.
In a trading environment shaped by overlapping geopolitical and fiscal challenges, goldâs latest all-time high underscores its enduring appeal as an anchor in turbulent times. Investors and policymakers alike will monitor upcoming data releases, diplomatic developments, and central-bank commentary for clues on whether the metalâs upward march will continue or stabilize after the historic milestone.
Crédito da imagem: Bloomberg
