Will gold break the $5000 level in 2026? Major banks are betting on a bullish scenario

Gold experienced unprecedented highs in 2025, with the price of gold breaking the $4,300 per ounce barrier in mid-October before retreating to near $4,000 by the end of November. These movements have raised repeated questions among investors about whether 2026 will see an even larger jump toward $5,000 or if the market is heading for a sharp correction.

Economic and Monetary Factors Support Optimism About Gold Prices

The picture remains unclear, but initial indicators suggest continued strong support for gold prices in the coming year. The slowdown in global economic growth and the return of accommodative monetary policies have prompted investors to reconsider their portfolio allocations, with increasing focus on safe-haven assets and reliable refuges.

In this context, the International Monetary Fund warned that global public debt has exceeded 100% of GDP, raising serious concerns about long-term financial stability. These major economic pressures have reinforced gold’s role as a tool for preserving the real value of wealth in an unstable economic environment.

Major Investment Banks’ Gold Price Forecasts

Several major banks have issued optimistic forecasts for gold’s trajectory in 2026:

HSBC Bank expects gold to reach $5,000 in the first half of 2026, with an expected average of $4,600 for the entire year, compared to an average of $3,455 in 2025.

Bank of America also raised its forecast to $5,000 as a possible target, but noted the potential for short-term corrections, with an expected annual average of $4,400.

Goldman Sachs adjusted its forecast to $4,900, citing strong inflows into gold ETFs and continued robust central bank purchases.

J.P. Morgan anticipates gold reaching around $5,055 by mid-2026, noting that the price has already surpassed its initial 2025 expectations.

The most consensus among analysts centers around levels between $4,800 and $5,000, with an annual average ranging from $4,200 to $4,800.

Investment Demand and Central Banks Maintain Momentum

Data from the World Gold Council reveal that total gold demand in Q2 2025 reached 1,249 tons, up 3% annually, with a total value of $132 billion, up 45%.

Gold ETF inflows have surged, with assets under management rising to $472 billion and holdings reaching 3,838 tons, close to the historical peak of 3,929 tons. This strong institutional interest reflects deep conviction in gold’s importance within modern portfolios.

On the central bank front, 44% of global central banks now hold gold reserves, up from 37% in 2024. The Chinese central bank alone added over 65 tons in the first half, marking its twenty-second consecutive purchase, while Turkey increased its reserves to over 600 tons.

Supply-Demand Gap Deepens Upward Pressure

Mine production hit a record 856 tons in Q1, but the 1% annual increase is insufficient to close the widening gap with growing demand. The situation is exacerbated by a 1% decline in recycled gold, as holders prefer to keep their holdings amid expectations of continued price rises.

The global average extraction cost rose to around $1,470 per ounce in mid-2025, the highest in a decade. This limits miners’ ability to ramp up production quickly, further supporting upward price pressures.

US and Global Monetary Policies Open the Path for Gains

The US Federal Reserve cut interest rates by 25 basis points in October 2025, bringing the range to 3.75-4.00%, marking the second cut since December 2024. Markets are pricing in another 25 basis point cut at the December 2025 meeting, potentially the third of the year.

Reports from BlackRock suggest the Fed may target an interest rate of 3.4% by the end of 2026 in a moderate scenario. The decline in real bond yields from 4.6% to 4.07% reduces the opportunity cost of holding gold, an asset that does not generate direct interest.

European and Japanese central banks continue their easing policies, creating a favorable global environment for safe-haven assets. The US dollar index has fallen approximately 7.64% from its peak at the start of the year, boosting gold’s attractiveness to foreign investors.

Geopolitical Tensions Sustain Institutional Demand

Trade disputes, tensions in the Middle East, and issues related to Taiwan have all fueled uncertainty about global economic stability. According to Reuters, geopolitical uncertainty in 2025 increased demand by 7% year-over-year, with major funds hedging against emerging market risks.

As geopolitical pressures intensified, spot prices surged above $3,400 in July 2025 and continued rising to surpass $4,300 in mid-October. This historical behavior confirms that any new shock in 2026 could push prices to new record levels.

Technical Analysis Indicates a Accumulation Phase

On the daily chart, gold closed November trading at $4,065, after touching its all-time high of $4,381 on October 20. Gold broke the ascending channel line but still maintains the main upward trendline.

Strong support appears at the $4,000 level, and if broken, the price could target the $3,800 zone (50% Fibonacci retracement). On the resistance side, $4,200 is the first hurdle, followed by $4,400 and $4,680.

The Relative Strength Index (RSI) remains at 50, indicating neutrality without overbought or oversold conditions. The MACD indicator stays above zero, confirming the overall bullish trend. Technical forecasts suggest the price may trade within a range of $4,000 to $4,220 in the near term.

Correction Possibility Does Not Cancel the Bullish Scenario

Some analysts warn of a potential correction toward $4,200 if investors take profits, but they do not expect a drop below $3,800 unless a major economic shock occurs. Goldman Sachs indicated that sustained prices above $4,800 would put the market to a real test of gold’s ability to maintain these levels.

However, J.P. Morgan and Deutsche Bank analysts see that gold has entered a new price zone that is difficult to break, thanks to a strategic shift in investor perception of gold as a long-term asset rather than a short-term speculative tool.

Price Outlook in the Middle East Region

Central banks in the region have begun increasing their reserves, with the Central Bank of Egypt adding one ton in Q1, and the Qatar Central Bank adding 3 tons. In Egypt, forecasts suggest gold could reach around 522,580 Egyptian pounds per ounce, a 158% increase over current prices.

In Saudi Arabia and the UAE, if gold prices approach $5,000 as expected, this could translate to approximately 18,750 to 19,000 SAR per ounce, and 18,375 to 19,000 AED per ounce, assuming exchange rates and global demand remain stable.

Conclusion: Will Gold Decline or Continue Rising?

Despite the possibility of short-term corrections, economic and monetary fundamentals lean toward continued upward support for gold prices in 2026. The widening supply-demand gap, ongoing central bank purchases, accommodative monetary policies, and declining real yields all support the potential for gold to reach new levels.

If real yields stabilize around 1.2% and dollar pressure persists, gold could find itself on a sustainable upward trajectory. However, a decline remains possible if market confidence improves and inflation drops quickly.

Overall, the most likely scenario points to continued rise toward $4,800–$5,000, with room for corrections, but without breaking the key support at $3,800 as long as global economic fundamentals remain unchanged.