Gold could hit US$5,000 an ounce in 2026 if risk hedging persists: market watchers

Returns are expected to moderate for the precious metal in the new year, say analysts

Benicia Tan

Published Wed, Dec 17, 2025 · 03:02 PM

“The move into gold is not about de-dollarisation, it’s about 'de-fiatisation',” says Guy Wolf, global head of market analytics at Marex. PHOTO: BT FILE

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SINGAPORE] Gold has surged more than 60 per cent since the beginning of 2025 – its strongest annual performance since 1979 – and is now firmly consolidating above US$4,000 an ounce. 

While the precious metal may not perform quite as well in the months ahead, some analysts see it testing US$5,000 an ounce by the end of 2026 on the back of continued central bank buying, government policy shifts and geopolitical risk hedging. 

These were exactly the “structural factors” that spurred its rise in 2025, said Robin Tsui, Asia-Pacific gold strategist at State Street Investment Management. “To hit the bull case, I think we need some of what we call black swan events: equity market corrections, more political tensions and more rate cuts than expected.” 

He noted that central banks in emerging markets such as China, Poland and Turkey have been steadily increasing their gold reserves over the past three years. Meanwhile, global reported net purchases by central banks through October totalled 254 tonnes year to date, based on data from the World Gold Council.

“If we continue to see central banks ramp up buying, then that will definitely be the top driver of keeping the current momentum,” said Tsui. Gold exposure among central banks in emerging markets remains notably lower than those in developed markets, based on data from the World Gold Council. 

Gold accounted for 8.3 per cent of China’s foreign exchange reserves in November, up from 5.9 per cent in January this year, based on data from China’s State Administration of Foreign Exchange published on Dec 7. 

Potential headwinds

Not everyone is bullish on gold, though. Research firm BMI is projecting a decline in the price of the precious metal to less than US$4,000 an ounce, as the monetary easing cycle that began in 2024 starts to lose momentum, and in particular as the US Federal Reserve eventually pauses the cutting of interest rates.

“With the global economy set to stabilise further in 2026, tariff uncertainty receding and most of the downside to the US dollar behind us, gold’s historic rally is likely to lose its shine by the third quarter of 2026,” BMI said in its 2026 commodity price outlook on Dec 7. 

BMI’s Country Risk team believes the US dollar index is unlikely to experience the same amount of volatility in 2026 as it did in early 2025, “inherently capping both industrial and precious metal price growth”. 

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