Gold prices forecast for 2026 has everyone scratching their heads

Gold has been on a remarkable run in 2025, rising more than 60 per cent since the start of the year, far outpacing the performance of major stock indices. With geopolitical tensions, inflationary pressures, and global economic uncertainty continuing to drive investment flows into the precious metal, experts predict that gold’s rally will extend into next year and beyond. Some analysts even foresee prices reaching $5,000 per ounce by 2026. For Pakistani investors, this amounts to nearly Rs 1.4 million per ounce.

THE RISING DEMAND FOR GOLD

Gold’s ascent is fueled by multiple factors, including the expectation of a potential interest rate cut by the US Federal Reserve, geopolitical instability, and a weaker US dollar. According to an article by Investopedia, on Monday, gold spot prices climbed to $4,255.04 per ounce, the highest level since October 21. Meanwhile, US gold futures for February delivery rose 0.8 per cent to $4,290.40. Now, analysts are predicting that gold could rise to $4,500 per ounce in 2026, with further upside possible if global economic uncertainty persists.

Moreover, the expectation of lower interest rates in the US is giving gold additional momentum. Markets are increasingly betting that the Fed will cut rates in December, with the CME FedWatch tool showing an 88 per cent probability of such a move. A rate cut typically supports gold prices, as the metal becomes more attractive in a low-interest environment. Furthermore, expectations that the next Fed chair will take a more dovish stance are boosting demand for gold, which doesn’t offer yields like bonds or savings accounts.

WHY THIS MATTERS FOR PAKISTAN’S INVESTORS?

In Pakistan, where inflation is a constant concern, gold has long been viewed as a reliable store of value. As global conditions continue to put pressure on currencies and financial markets, many Pakistani investors are turning to gold to safeguard their wealth. Given the current market trends, gold could be an attractive investment opportunity in the coming years.

Goldman Sachs and other major Wall Street firms are also bullish on the metal’s future. According to a recent survey of over 900 institutional investors, nearly 70 per cent expect gold prices to continue climbing, with 36 per cent forecasting that gold could exceed $5,000 per ounce by the end of 2026. Many investors cite global central bank buying and persistent fiscal concerns as major factors behind the surge in gold prices.

THE IMPACT OF THE WEAKENING US DOLLAR

A major driver of gold’s rise is the weakness of the US dollar, which has slipped significantly in recent months due to growing concerns over US government debt and the potential for further monetary easing by the Federal Reserve. A weaker dollar makes gold more affordable for buyers using other currencies, further fueling global demand for the precious metal.

Gold is often viewed as a hedge against currency depreciation, making it particularly attractive during times of economic uncertainty. As the US dollar weakens, investors increasingly seek out gold as a safe haven.

GEOPOLITICAL RISKS AND GLOBAL ECONOMIC CONCERNS

Geopolitical instability is also playing a crucial role in pushing gold prices higher. With tensions escalating in various regions around the world, investors are looking to gold as a stable asset to protect their wealth. In addition, stock market volatility is prompting risk-averse investors to move funds into gold, which has historically maintained its value in times of market turmoil.

Deutsche Bank, in its latest analysis, has raised its gold price forecast for 2026 to $4,450 per ounce, citing strong demand from central banks and exchange-traded funds (ETFs) as key factors in supporting gold’s price. The bank also noted that supply constraints, coupled with surging demand, will likely continue to drive prices higher.

SILVER AND OTHER PRECIOUS METALS ON THE RISE

It’s not just gold that is seeing strong demand. Silver could also rise to $60 per ounce in 2026, experts say, while other precious metals like platinum and palladium are also gaining ground. As of the latest data, platinum has gained 1.6 per cent, trading at $1,698.85, while palladium has risen 1.7 per cent to $1,475.02.

LOOKING AHEAD: WHAT’S NEXT FOR GOLD?

As we approach the end of 2025 and look ahead to 2026, gold is set to remain a key asset in the global investment landscape. Given the ongoing volatility in financial markets, expectations of lower US interest rates, and the growing demand from central banks, gold prices could continue to climb in the years to come.

For investors in Pakistan, gold offers a potentially lucrative opportunity. As the global economic environment remains unpredictable, the yellow metal’s reputation as a safe haven could make it an essential part of any investment strategy in the coming years.

Gold’s continued rise underscores its position as a critical asset in times of economic uncertainty. Whether it reaches $4,500 or $5,000 per ounce, it’s clear that the demand for gold is not likely to diminish anytime soon. With the global financial outlook still uncertain, gold remains a vital investment for those seeking to protect their wealth in an increasingly volatile world.