Gold can hit $5,000, but don’t expect to see another 65% gain in 2026
NEW YORK (December 12) Although the year isn’t completely over yet, you can’t blame gold investors for wanting to pop the champagne and celebrate a little early: the precious metal is on track to end the year with a 60% gain, its best annual performance since 1979.
Rajat Bhattacharya, senior investment strategist at Standard Chartered, noted in his 2026 outlook that this is the second consecutive year gold has outperformed both stocks and bonds, and it has outperformed bonds for 10 straight years.
“Gold’s record-breaking rally, fuelled by geopolitical uncertainty and concerns about easing fiscal policies worldwide, has lifted the price of the precious metal by over 50% this year and by more than 150% over the past three years,” he said. “We have a strong conviction that gold will outperform global stocks and bonds again in 2026.”
Although there are growing expectations that the party will continue through 2026 as market conditions favour higher prices, analysts are also trying to temper bullish expectations.
Bhattacharya expects gold prices to average $4,500 an ounce over the next 12 months.
“While gold appears expensive in some relative value metrics, strategic and cyclical factors suggest the ongoing technical correction in gold is an opportunity for those underinvested to build allocations toward desired targets,” he said. “Our balanced asset allocation strategy has a 7% allocation to gold.”
At the same time, there is a growing chorus of analysts who say they expect gold prices to hit $5,000 an ounce next year. However, that would represent a gain of 16%, significantly slower than this year’s rally and the 27% gains seen in 2024.
Carsten Fritsch, commodity analyst at Commerzbank, noted that gold prices have doubled since February 2024. He added that gold’s current pace is not sustainable.
The German bank expects gold prices to rise to $4,400 an ounce next year.
Chantelle Schieven, head of research at Capitalight Research, remains bullish on gold through 2026 but added that questioning the trajectory and momentum is healthy.
“Gold’s had two really good years, so it’s reasonable to start asking if this momentum can last,” Schieven said. “Gold may be in bubble territory, but that doesn’t mean it’s going to pop next year. We continue to see a tectonic shift in global financial markets to support higher long-term gold prices. I think we could easily see $5,000 an ounce in 2026.”
Schieven added that one reason she remains bullish is that technical price action continues to build significant support at higher levels. After holding above $2,000 an ounce throughout 2024, gold established new support at $2,500 an ounce at the start of the year, which quickly rose to $2,800. By the summer, prices had formed a new support range between $3,000 and $3,500, which became the launching pad for October’s all-time high of $4,366 an ounce.
In an interview with Kitco News, Aakash Doshi, chief gold strategist at State Street Investment Management, said he sees gold prices consolidating between $4,400 and $4,500 an ounce next year, but added that risks are skewed to the upside.
“It’s pretty clear that $3,000 has become the new $2,000 level, and now we are starting to see $4,000 as the new $3,000,” he said. “With this strong support, I think gold’s next 25% move remains higher, not lower.”
One key reason most analysts remain bullish on gold is that little in the global marketplace is expected to change.
In his annual outlook webinar, Michael Widmer, head of metals research at Bank of America, said that gold bull rallies typically peak only when the underlying drivers that initially triggered the rally fade and do not end simply because prices rise.
Gold’s rally, which began in earnest in late 2022, has been supported by robust central bank demand. More than 3,000 tonnes of gold have flowed into official global reserves over the past three years. Although official 2025 figures have yet to be finalized, analysts at the World Gold Council expect central bank gold reserves to rise between 750 and 900 tonnes this year.
Analysts note that central banks began increasing gold purchases after the U.S. and its allies weaponized the U.S. dollar against Russia following its invasion of Ukraine.
They also point out that global trade wars in 2025 have further weaponized the U.S. economy, prompting more aggressive diversification away from the U.S. dollar and into gold, which carries no geopolitical third-party risk.
The year 2025 marked a historic milestone for central bank gold demand, as official gold reserves surpassed holdings of U.S. Treasuries. According to Bank of America, gold now represents an average of about 15% of total central bank reserves. However, Widmer’s modeling suggests reserves would be fully optimized with an average gold allocation closer to 30%.
Although central bank demand will continue to provide a floor for the gold market, some analysts say next year will be the year of the retail investor.
Schieven said that the expected interest rate cuts next year, combined with sticky inflation, will push more investors out of bonds and into gold.
“Because of falling real yields, bonds just don’t hold the same value; they don’t have the same sense of safety as they used to,” she said.
Doshi added that he expects gold to play an increasingly important role as a portfolio diversification tool in 2026, as U.S. equity markets and bond prices remain highly correlated.
“If stock/bond correlations remain historically elevated, gold’s role as a diversifier and left-tail hedge becomes even more important as investors seek alternatives to traditional 60/40 or 70/30 portfolios,” he said in his 2026 outlook report.
KitcoNews
