Continued macroeconomic and geopolitical uncertainties are likely to create strong tailwinds for gold in 2026, supporting a sharp uptick in prices, according to the World Gold Council (WGC).

In its research paper, Gold Outlook 2026: Push ahead or pull back, the council said gold witnessed a remarkable 2025, achieving over 50 all-time highs and edging over 60 per cent by end-November, buoyed by a mix of heightened volatilities, a weaker US dollar and positive price momentum. As of January 7, 2026, gold prices are at US$4,435.23 per ounce.

Ongoing uncertainties faced by investors define gold’s outlook for 2026, WGC said, adding that the year 2026 – just like 2025 – may bring significant volatility across financial markets.

“While the current gold price broadly reflects the prevailing macroeconomic consensus and suggests a rangebound performance, our analysis indicates that the forces of softer growth, accommodative policy and persistent geopolitical risks are more likely to support gold than to undermine it,” remarked the council. 

In a scenario where the global economy descends into a more synchronised slowdown, driven by trade tensions, regional conflicts, and dampened business and consumer confidence, gold could surge 15 per cent to 30 per cent in 2026 from current levels, it added. 

“Investment demand, particularly via gold ETFs (exchange traded funds) would remain a key driver, offsetting weakness in other areas of the market, such as jewellery or technology,” WGC continued.

Rising prices, which are known to spur investor interest and accelerate momentum, have the opposite effect on the jewellery trade.

Jewellery demand in the third quarter of 2025 fell 19 per cent year on year across all markets, almost without exception as record gold prices made jewellery more expensive, according to WGC’s Gold Demand Trends Q3 2025 report. 

In contrast, the value of jewellery consumption – at US$41 billion – was up 13 per cent as consumers spent more on jewellery.

Flip side

Meanwhile, a successful outcome from policies set by the Trump administration would accelerate economic growth and reduce geopolitical risk, leading to higher rates and a stronger US dollar, pushing gold lower.

Under these conditions, “reflation” is likely to take hold, pushing activity higher and lifting global growth toward a firmer trajectory. As inflation pressures mount, the Fed would be forced to hold or even hike rates in 2026.

“Rising yields, a stronger dollar, and the shift toward risk-on positioning weigh heavily on gold, prompting a notable withdrawal of investor interest. With hedges unwound and retail demand softening, the backdrop turns decidedly negative, resulting in a gold price correction of between 5 per cent and 20 per cent, from current levels,” said WGC.

Slower economic growth and further cuts in interest rates, however, could see moderate gains for gold. Still, gold retains its allure as a safe-haven asset.

“Despite the plausibility of a bearish scenario, it is likely that investors will maintain some exposure to gold given the unpredictability of current geoeconomic dynamics,” the council noted. “In a world where shocks and surprises are increasingly the norm, gold’s capacity to provide diversification and downside protection remains as relevant as ever.”