Gold will continue to shine in 2026
In the past twelve months, gold has become one of the most sought-after investments. The price rose by more than 50 percent to a record value of almost USD 4,400 per troy ounce. This made 2025 the year with the best performance since 1979, with silver following suit and climbing to a record high of USD 54 per ounce. This rally has been fueled by geopolitical tensions, inflation fears, and financial instability. The precious metal thus confirmed its status as a safe haven.
Flight to safe investments
The increasing influence from politics is putting pressure on the Federal Reserve (Fed) to lower interest rates further. This increased inflation fears and raised questions about the Fed's independence. This development has further increased the attractiveness of gold.
Central banks, especially in developing countries, played an important role in the gold rally by diversifying their reserves. Central bank efforts to de-dollarize have pushed the world's gold reserves to about 35,000 tons, worth over $4.5 trillion. This sum exceeds foreign holdings of US government bonds. Gold now accounts for about 25 percent of the world's central bank reserves, up from 10 percent 10 years ago. We expect this trend to continue in 2026 as increasing geopolitical fragmentation and ongoing inflation concerns will continue to drive demand for gold.
Private investors in the gold rush
Private investors have also bought gold bars, coins and gold-backed exchange-traded funds (ETFs) on an unprecedented scale and contributed to this increase. Their interest results from the concern of missing out on a price rally. The reasons for this concern stem in particular from concerns about the preservation of the value of the US dollar and US government bonds. The politically motivated weakening of the US dollar by the US administration plays an important role in this.
The sharp depreciation of the yen against the US dollar has significantly weakened the purchasing power of the Japanese population and led them to seek refuge in gold. This development is remarkable for a country that was previously characterized by deflationary stagnation.
“The global search for alternatives to the dollar puts gold in the spotlight”
Jan Wirken, Senior Equity & Commodity Research & Advisory Expert
Risks of the rush
Despite all the enthusiasm, experts warn of risks, including a bubble. In the past, gold rallies have often been followed by sharp corrections. Gold is currently trading more than 20 percent above its 200-day moving average, indicating speculation. The price of gold temporarily fell in October 2025 and the sustainability of the current price level is being questioned. However, we do not share this concern and do not believe that gold is in a bubble. While volatility is possible in the short term, we believe the drivers such as de-dollarization, central bank purchases and inflation fears are not abating. In addition, gold diversifies the portfolio as it performs relatively well during times of market stress and has a low or negative correlation with stocks and bonds.
Conclusion
In 2026, gold demand will continue to be driven by de-dollarization, inflation concerns, geopolitical instability and growing doubts about the Fed's independence. Our price target for the next three months is around USD 4,200.
