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Informist, Thursday, Dec. 4, 2025

 

NEW DELHI – Gold prices are likely to remain largely rangebound in 2026, but a global economic slowdown or worsening geopolitical tensions could trigger a fresh rally, the World Gold Council said in its Gold Outlook 2026 report.

 

"Gold has experienced a remarkable 2025, achieving over 50 all-time highs and returning over 60%," the council said. The rally was fuelled by a "supercharged geopolitical and geoeconomic environment," a weaker US dollar, lower interest rates, and strong investor and central bank demand, it said.

 

Gold prices currently reflect "macroeconomic consensus expectations related to economic growth, inflation, and monetary policy," the council said. Under this base-case scenario, the metal may remain "rangebound if current conditions persist" in 2026, it said.

 

Markets are pricing in stable global economic growth of around 2.7–2.8%, about 75 basis points of additional interest rate cuts by the US Federal Reserve, and a slightly firmer dollar, according to the report. But the council cautioned that "the macroeconomy rarely follows the path that market consensus dictates".

 

UPSIDE, DOWNSIDE

In a moderate slowdown scenario, which the council terms a "shallow slip", gold could rise 5–15% next year as US growth softens, risk appetite weakens, and the Fed cuts rates more aggressively. "This combination of lower interest rates and a weaker dollar paired with heightened risk aversion would create a continued supportive environment for gold," it said.

 

The council added that "continued strategic central bank buying and potential new investment entrants, such as insurance companies in China or pension funds in India, could further support gold's positive trend."

 

In a deeper global downturn--termed "doom loop"--gold could surge 15–30% as falling yields and intensifying geopolitical stress drive a sharp flight to safety, the council said. "This combination would create exceptionally strong tailwinds for gold," it said.

 

Global gold exchange-traded funds have already seen inflows of about $77 billion in 2025, adding more than 700 tonnes to their holdings, as per the report.

 

On the downside, the World Gold Council said a strong reflationary push driven by pro-growth policies in the US could lead to higher inflation, rising bond yields, and a stronger dollar. "Rising yields, a stronger dollar, and the shift toward risk-on positioning weigh heavily on gold," it said, warning of "a gold price correction of between 5% and 20% from current levels". In such a scenario, it said, "Gold ETF holdings could see sustained outflows as investors rotate into equities and higher-yielding assets."

 

WILD CARDS

Central bank buying and recycling supply remain key wild cards for 2026, as per the report. "Official sector purchases have been strong and there are good reasons to expect central bank buying to continue," the council said. A sharp pullback, however, could hurt prices, it said.

 

In India, "consumers have pledged more than 200 tonnes of gold jewellery through the formal sector this year alone", as per the council's report. A sharp economic slowdown could trigger forced sales and raise secondary supply, it said.

 

Despite the possibility of a bearish outcome, investor demand is likely to stay resilient due to rising market volatility, as per the report. "In a world where shocks and surprises are increasingly the norm, gold's capacity to provide diversification and downside protection remains as relevant as ever," the council said.  End

 

US$1 = INR 89.90

 

Reported by Pallavi Singhal

Edited by Rajeev Pai

 

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