Gold prices may rise between 15 per cent and 30 per cent in 2026, according to a new outlook from the World Gold Council (WGC), which expects lingering geopolitical tensions and a flight to safety to keep demand elevated.
The projection comes after a remarkable run in calendar year 2025 (CY25), during which gold surged nearly 53 per cent amid US tariffs, global uncertainty, and large-scale central bank purchases, reported Business Standard.
The WGC report noted that falling yields, heightened geopolitical anxiety, and a strong investor preference for safe assets could create “exceptionally strong tailwinds” for bullion in CY26. Under such conditions, the precious metal could record one of its strongest years yet.
The Drivers Behind Gold’s Rally in 2025
Investors poured aggressively into gold during CY25 as global markets reacted to rising friction between the US and major economies, tariff escalations, and persistent geopolitical flashpoints. Central banks also played a critical role, buying gold at a rapid pace while major economies recalibrated interest-rate strategies.
In parallel, investment demand through gold ETFs soared. WGC data shows global gold ETFs attracted $77 billion in inflows in CY25, adding more than 700 tonnes to holdings. Extending the timeframe back to May 2024 raises the figure to 850 tonnes, still only half the size of allocations seen during earlier bull cycles, leaving, as WGC puts it, “ample room for growth.”
The WGC expects ETFs and other investment vehicles to remain the biggest source of demand in CY26, even if jewellery purchases or gold-linked technology sales soften due to high prices.
Investment demand would be the key driver, helping offset any weakness in traditional segments, the report added.
With portfolio hedging set to remain a priority for investors worldwide, gold’s reputation as a safe haven is likely to reinforce its momentum.
The Bear Case: What Could Pull Prices Down
While the WGC sees a strong upside scenario, it also outlines a possible downside in which gold could fall between 5 per cent and 20 per cent next year.
For such a correction to take place, the organisation says the turning point would be successful implementation of Donald Trump’s economic policies, leading to stronger-than-expected US growth driven by fiscal support.
If reflation takes hold and the US Federal Reserve opts to hold or raise rates in 2026, the result would be higher long-term US Treasury yields, a stronger US dollar, and renewed risk-on appetite among global investors.
Each of these factors typically weighs on gold, increasing the opportunity cost of holding a non‑yielding asset.
Risk-On Sentiment Could Trigger ETF Outflows
A shift toward equities and high‑yielding assets could spark sustained outflows from gold ETFs, the WGC warns. Much of gold’s premium since 2022 has stemmed from geopolitical hedging, particularly after Russia’s invasion of Ukraine. If that premium diminishes, ETF withdrawals may follow.
Still, WGC analysts highlight that even in a downturn, opportunistic buying by long-term investors and consumers can act as a buffer against steep declines.
What To Expect Heading Into 2026
The gold market now faces a dual-path scenario: one driven by safe-haven appeal and declining yields, the other shaped by accelerating US growth and rising rates. With volatility expected to remain high, investors will be watching central bank policy, geopolitical developments, and ETF flows closely.
