Outlook for 2026: Gold Enters a New Era

In 2025, gold posted its strongest performance since 1979. This momentum marks a structural turning point for the gold market, which has significantly exceeded its usual historical behavior and is now entering a new dimension.

While 2025 was buoyed by gold investors, easing interest rates, and the overall rise in financial markets, 2026 is beginning with new questions. Interest rates could continue to fall, but to a lesser extent. In addition, investment demand remains dependent on market sentiment, while central banks and jewelers are curbing their purchases.

How should we approach this new era for gold? And is this momentum set to continue into 2026?

2025: an extraordinary year!

2025 exceeded all expectations. For the third consecutive year, gold rose by more than 10%. In 2025, the gold price in dollars posted a performance of +65%. This is its strongest increase since 1979.

These performances illustrate the truly exceptional nature of this year's momentum. Unlike the bullish cycle of 2000-2011, the price of gold now seems to be supported by faster and more intense movements, similar to those seen in the 1970s.

Source: Macrotrends

Unlike in previous years, gold's performance this year is being driven by investment demand, rising stock market indices, and easing interest rates. Analysis of the data available to us indicates that the performance observed in 2025 is largely attributable to momentum, i.e., strong bullish enthusiasm. However, this does not rule out, at this stage, a continuation of the upward trend, which remains vigorous and implicitly supported by long-term fundamentals.

Investment demand at its highest level

Over the first three quarters of 2025, average investment demand rose by +76% compared to 2024. The scale of this massive return of investment in gold is comparable to that seen in 2020 and 2022.

In particular, demand for gold via ETFs shifted from selling flows to clear buying flows. As a result, average quarterly demand for ETFs reached 206 tons over the first three quarters, a level not seen since 2020.

Source: World Gold Council

But is this investment flow enough to explain the rise in gold prices?

Compared to the previous year, overall demand remained virtually stable over the first three quarters. Average demand for jewelry fell by more than 20%. Similarly, central banks maintained a very steady pace of purchases, despite a 22% decline in average demand compared to 2024. This phenomenon is typical of periods of rising gold prices, as the jewelry sector has negative elasticity.

Conversely, there is a positive link between investment demand for gold and the price of gold. Nevertheless, all other things being equal, the sensitivity of the price of gold to investment demand, although significant, remains relatively very low (at least on a quarterly basis). Only a sudden increase in demand, particularly investment demand via ETFs, can be associated with a sharp rise, and potentially a peak, in the price of gold.

Nevertheless, while this context is reminiscent of the 1970s, the environment is vastly different. Unlike the 1970s, the world of this first quarter of the century is characterized by a massive return to gold by all institutions. The instability of the dollar and bonds undoubtedly highlights the need to use gold to ensure the stability of the global financial order.

Source: World Gold Council

Gold prices rise: a return to the 1970s?

significantly. However, this outperformance of gold relative to its normal cyclical behavior is not entirely exceptional. As the chart below shows, gold tends to follow cycles of approximately 15 to 16 years. The last few years of this long cycle, shown at the beginning of the chart, are characterized by an extreme steepening of the gold price curve. This explains the significant variance in the evolution of gold from one cycle to another.

The rise in the 1970s was the most significant, followed by the rise observed in 2010 with a less pronounced peak in prices, and finally the false peak in the mid-1990s. Several studies have already led us to consider this long cycle since the liberalization of the gold price, with ideally twelve years of growth and four years of consolidation. Considering that the last major low in the gold price occurred in 2015, this would indeed correspond to the upward movement we are seeing today.

Assuming that the intensity of the upward trend correlates with the duration of the appreciation phase, it is not unreasonable to anticipate a continuation of the movement. This could support the hypothesis of a more sustained rise.

Furthermore, econometric analysis suggests that the price of gold follows a non-random pattern, characterized at a minimum by strong momentum. In other words, a quarter with bullish performance tends to be followed by another bullish quarter. Assuming only the validity of the momentum model below, the expected performance for 2026 could reach +20% to +25%. However, other factors must also be taken into account.

Lower rates drive up prices

The rise in the price of gold in 2025 was therefore largely fueled by momentum, i.e., an intensification of the upward trend observed since 2023. Nevertheless, it should be noted that interest rates played an accelerating role. With a 50 basis point cut in US rates, the price of gold benefited from a favorable monetary environment.

Furthermore, a further cut in US rates could further support the rise in gold. Nevertheless, econometric analysis highlights the high variability of this dynamic, with gold prices rising from +3% to nearly +15% in the event of a 25 basis point rate cut. However, it is clear that the fall in rates throughout the year has played a strategic role in the valuation of gold.

Source: World Gold Council

The prevailing financial optimism was reinforced by rising indices. The S&P 500 posted a performance of nearly +17%, also up for the third consecutive year. Over the last ten years, it is clear that the price of gold has moved in parallel with stock market indices. This phenomenon is particularly true in periods of economic growth, as is currently the case.

As a result, gold benefits from abundant liquidity in the financial markets, which stimulates demand for financial investment and, ultimately, sustained rises in the price of gold.

Gold production stagnates

While gold resales are up 1.6% on average compared to 2024, gold production is down slightly, by 0.62% on average. Despite this, gold production still accounts for nearly 74% of total gold supply.

There are two mechanisms at work here that “neutralize” supply and enable short- and medium-term momentum movements:

The existence of recycled gold supply, which is positively correlated with the price of gold but marginal in relation to overall supply.

The presence of a dominant mining supply that is not very sensitive to the price of gold in the short or medium term.

In addition, we observe that production costs are increasing by around 10% in the first quarter of 2025 compared to 2024. This increase now brings the cost of producing gold per ounce closer to the $1,600 threshold. Nevertheless, it should be noted that the spectacular rise in the price of gold this year far exceeds the increase in production costs.

Source: World Gold Council

Consequently, the current context of rising gold prices, combined with a more limited increase in production costs, is particularly favorable for mining companies. Based on the data available to us, we can anticipate that mining companies' margins will increase by between 50% and 100% in some cases, although the situation may differ from one company to another.

Furthermore, this phenomenon may reflect a decoupling between the “fundamental price” of gold and its financial value. While this valuation remains moderate, it is nevertheless possible that it currently exceeds the historical norm by 20% to 30%. This phenomenon, through an adjustment in supply over the next few years, could lead to new records in gold production.

Can the price of gold really continue to rise?

We have shown that gold was supported by multiple factors in 2025:

• Increased investment demand, despite declining demand from jewelry and central banks.
• Lower interest rates, which strengthen investor interest in purchasing gold.
• Rising equity markets, which also stimulate demand for metals through a “liquidity effect.”

Conversely, several factors could threaten the trend observed so far. Indeed, a stabilization of interest rates combined with a decline in investment demand could have a negative impact on the price of gold. Furthermore, the lack of a rebound in demand from jewelry or central banks could also increase the volatility of gold in the coming months.

Breaking down the price of gold into relatively short 4-year cycles, or presidential cycles, it appears that gold is significantly outperforming compared to the 2000s. More specifically, gold's outperformance relative to its historical norm tends to be confirmed in subsequent years.

Source: World Gold Council

All other things being equal, if gold tends to follow its historical norm, a price increase of around 10% to 12% can be observed during the second year of the US election cycle. However, this does not take into account the potential persistence of the bullish divergence or its possible return to normal, in which case a stable or slightly lower performance for gold could also be considered.

In this context, banks are generally forecasting an upward trend. For example, Deutsche Bank is targeting $4,450 per ounce in a central scenario, which is already in line with current levels. But more optimistically, JP Morgan “expects prices to average $5,055 per ounce by the last quarter of 2026, then rise to $5,400 per ounce by the end of 2027.” This would correspond to a performance of +10% to +15% compared to current levels, which is consistent with the scenario developed for the seasonality of gold.

Conclusion 

The return of investors to gold in 2025 offsets the decline in demand from jewelry and central banks. In particular, investment flows via ETFs have strongly influenced gold demand this year. The predominance of momentum, similar to the dynamics observed on stock market indices, reinforces uncertainty about the trajectory of the gold price in the coming months.

Nevertheless, as the consensus forecasts of the major banks suggest, it appears that gold will continue to be supported by favorable momentum, although this will be less pronounced than in 2025. Consequently, in addition to the momentum effect, the evolution of the gold price in 2026 also remains conditioned by the prospect of lower key interest rates in the United States, changes in liquidity and demand for investment, jewelry, and central banks. Furthermore, some banks do not rule out a phase of stagnation or consolidation in the price of gold.

The outperformance of gold, both relative to other assets and its historical behavior, also reveals the culmination of a vast cycle of revaluation that began in 2015-2016 and, more broadly, in the early 2000s. This has the effect of reducing the relevance of past behavior.

It is clear that gold is entering a new era. After the great abandonment of gold in the 1980s, the yellow metal is now reaffirming its eternal necessity.