As 2025 draws to a close, gold has registered its strongest two-year period since 1979, more than doubling in price and reaching a record high of more than $4,300 per ounce in October. The precious metal’s performance in ETF and physical metal markets has been driven by strong buying from central banks, safe-haven inflows, and global market uncertainties.
The drivers remain familiar, though certainly strong. Aggressive bullion acquisitions by central banks globally, particularly in Asia, have created scarcity and undermined US dollar dynamics.
Expectations of Fed rate cuts are also driving gold as a hedge. Geopolitical uncertainties and decoupled economic growth patterns have encouraged institutional and individual clients to turn to the traditional safety of gold.
There are still many bullish projections for the year 2026. Leading financial institutions, such as Goldman Sachs, believe the gold price could reach as high as $4,900 in 2026. Others believe that the place of gold in the portfolio could change from being an emergency-relief asset in a time of crisis policy.
This positive sentiment is limited by various factors. Market trends indicate the market may be overbought, with consolidation or a correction possible. A strong onset of global economic growth or a reversal of the Fed’s stance can weaken the appeal of the haven and thus pressure prices.
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The rising value of the dollar influences gold. Some bearish commentators forecast natural corrections of 10% to 20% in 2026, based on lower geopolitical risk premiums and less central bank purchases.
Even in their base cases, some analysts forecast that gold could move in a relatively narrow band as overall economic conditions stabilize.
Current record profits do not automatically ensure future success. Many analysts predict that the gold market's success this year might not translate into growth during 2026.