Gold’s bull market run will continue in 2026, prices to average $4,325/oz – ING

NEW YORK (December 11) Central banks remain hungry for bullion as ETF holdings near all-time highs, and even with gold prices trading above $4,200 per ounce, macro tailwinds and strong fundamentals point to further upside in 2026, according to Ewa Manthey, commodities strategist at ING.

In the ING 2026 Gold Price Outlook published this week, Manthey said the bank’s forecast for the yellow metal remains positive.

“Gold staged a record-breaking rally in 2025, doubling in value in under two years,” she noted. “We believe that gold’s main drivers, including central bank buying, Fed rate cuts, a weaker dollar, concerns about the Fed’s independence, and ETF buying, are all still in place, while the global macro environment remains broadly supportive for gold.”

“President Trump also recently said he has decided on his pick for the next Fed chair, a candidate that the market expects will push for lower interest rates,” she added. “All of these factors will benefit gold. We see gold prices hitting more record highs in 2026.”

Manthey noted that gold prices have always reflected global economic and political stress, typically rising during periods of elevated uncertainty. “In the wake of the global financial crisis, gold surged past $1,000,” she wrote. “During the Covid-19 pandemic, it climbed to $2,000. Then, when Trump announced tariffs in April, it surpassed the $3,000 mark. The $4,000 mark was hit during the recent prolonged US government shutdown.”

Global demand for the yellow metal also hit an all-time high in the third quarter of this year, reaching 1,313 tonnes according to World Gold Council data. “This surge was driven by strong investment demand, including purchases via exchange-traded funds, bars and coins, as well as significant buying by central banks,” Manthey said.

ETF investors added 222 tonnes to their gold holdings, representing the largest quarterly inflow in several years, while bar and coin demand remained strong at 316 tonnes. “Meanwhile, central banks bought 220 tonnes, up nearly 30% from the second quarter, led by emerging markets,” she said. “But jewellery demand fell 19% year-on-year to 371 tonnes, which was the sixth straight year-on-year decline, as record prices curbed consumption. However, in value terms, spending on jewellery rose 13% to $41bn, with higher prices offsetting weaker volumes.”

Central banks remain a key pillar of gold demand, Manthey said. “In Q3, central banks increased their buying pace following two consecutive quarters of slowing purchases,” she noted. “They bought an estimated 220 tonnes of gold in the quarter, 28% higher than the Q2 total and 6% above the five-year quarterly average. The National Bank of Kazakhstan was the largest buyer in the third quarter, while the Central Bank of Brazil added gold for the first time since 2021.”

“In October, central banks added a net 53 tonnes to reserves – a 36% increase from September and the strongest monthly gain since November 2024,” she added. “Year-to-date net purchases now stand at 254 tonnes, marking a slower pace than the previous three years as higher prices temper demand. Poland remains the standout buyer, leading both October and year-to-date with 83 tonnes. After a five-month pause, the National Bank of Poland resumed purchases, adding 16 tonnes last month and lifting its holdings to 531 tonnes, or 26% of total reserves.”

Meanwhile, China’s central bank – another top sovereign buyer – has made official gold purchases for 13 months in a row, with total holdings now exceeding 74 million ounces despite record high prices. “China is also attempting to widen its presence in the bullion market by extending gold storage facilities to foreign banks – an offer Cambodia has already accepted,” Manthey wrote, “signalling Beijing sees gold as more than a reserve asset, it's also a tool of financial influence.”

And even after three straight years of strong purchases, central banks are still hungry for more gold. “South Korea’s central bank is said to be considering adding gold to its reserves for the first time since 2013,” she noted. “Madagascar also signalled interest in increasing its gold reserves. Serbia's president also recently said that the country’s gold reserves will almost double to 100 tonnes by 2030.”

“Central banks’ appetite for gold is driven by concerns from countries about Russian-style sanctions on their foreign assets in the wake of decisions made by the US and Europe to freeze Russian assets, as well as shifting strategies on currency reserves,” Manthey said. “The pace of annual purchases by central banks has doubled since the outbreak of the Russia-Ukraine war, from about 500 metric tonnes a year to more than 1,000. Last year, central banks bought a combined 1,045 tonnes, accounting for about a fifth of overall demand. Poland, India and Turkey were the largest buyers in 2024, according to the World Gold Council.”

However, a key downside risk for gold prices is the possibility that central banks decide to sell their reserves. “In the Philippines, Benjamin Diokno, a board member of the central bank, recently said the bank should sell some of its ‘excessive’ gold holdings,” Manthey warned. “In the US, Senator Cynthia Lummis has proposed that the country sell a portion of its gold reserves to buy Bitcoin.”

“However, we believe the shift in central banks’ purchases has been more structural, and they will continue to add gold to their reserves, as strategies on currency reserves shift,” she said. “World Gold Council’s 2025 central bank survey showed the strongest intention to continue buying gold since it was initiated in 2019.”

And after a period of consolidation, gold ETFs and institutional investors are showing renewed appetite for gold, with Fed rate cuts expected to boost demand further.

“We expect ETF buying to pick up as the US Fed is likely to continue cutting interest rates, with ETF buying usually closely linked to Fed policy,” Manthey said. “There is still room for further additions, given the current total remains shy of the peak hit in 2020. More inflows could push gold even higher.”

One other potential headwind for gold prices is a rise in mining output, but ING does not see this as very likely.  

“Gold mine supply growth tends to be slow and relatively inelastic,” she noted. “Since 2019, global gold production has remained very stable. In practice, even with some supply growth, the impact on prices is likely to be limited. Gold demand is driven more by macro factors – real yields, the US dollar, central bank buying, and investment flows – changes in mine output rarely exert strong downward pressure on prices.”

With all these factors taken together, ING expects the gold rally to continue in 2026, though not at the pace seen this year.

“Looking into next year, central banks are still buying, Trump’s trade war is ongoing, geopolitical risks remain elevated, and ETF holdings continue to expand while expectations of more Fed rate cuts intensify, suggesting this bull run still has further to go,” Manthey wrote. “We see prices averaging $4,325/oz in 2026.”

“Downside risks include a major market sell-off, which could force investors to dump gold to raise cash,” she cautioned. “Other downside risks include reduced safe haven demand amid easing geopolitical tensions. Central banks selling their gold reserves pose another risk to our outlook. However, we expect the downside to be limited as any weakness will likely attract renewed interest from both retail and institutional buyers.”

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