The price of gold could rocket by a third next year to over $5,000, boosted by investor demand for precious-metal-linked ETFs.
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Flight to Safety
The World Gold Council said investment demand, particularly via gold exchange-traded funds (ETFs), would remain a key driver next year, offsetting weakness in other areas such as jewelery or technology.
“The combination of falling yields, elevated geopolitical stress and a pronounced flight-to-safety would create exceptionally strong tailwinds for gold, supporting a sharp move higher. Under this scenario gold could surge 15-30% in 2026 from current levels,” a WGC report said.
Gold ETFs have shone this year with the SPDR Gold Shares ETF (GLD) up nearly 60% in the year-to-date, see below, and the iShares Gold Trust (IAU) also surging 60% higher.
That has been off the back of the spot gold price which has regularly hit new records this year. As outlined by the WGC, that has largely been driven by investors seeking a safe haven during difficult economic times, such as President Trump’s tariffs, and geopolitical concerns from the Middle East to Ukraine and Taiwan.
Searching for Gold Boost
Other drivers have been central banks scooping up stocks of the precious metal, a weaker dollar and falling interest rates. Gold tends to do well in a low-rate environment.
However, doubts over where the next boost is coming from sent gold prices lower today. The spot gold price was down 0.15% in early trading to just shy of $4,200.
Investors, it seems, have already priced in another Federal Reserve cut to interest rates at its meeting next week, but like modern Midases they always want more.
“With investors a bit cautious ahead of the FOMC (Federal Open Market Committee) meeting, the market is largely pricing that the Fed will cut by 25 basis points. What the market needs now is a fresh trigger for (gold) prices to move higher,” ANZ commodity strategist Soni Kumari said.
Kumari highlighted ongoing profit-taking and added that any slide toward $4,000 would likely attract new buyers, given gold’s strong fundamental backing.
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