Gold has made its biggest jump since the 1979 oil crisis in 2025 -- with prices doubling in the last two years -- a performance which might previously have meant forecasts of a big correction. Yet a growing investor pool and factors ranging from U.S. policy to war in Ukraine mean analysts at JP Morgan, Bank of America and consultancy Metals Focus now see bullion hitting $5,000 per troy ounce in 2026.
Spot gold prices reached a record $4,381 in October, having never hit $3,000 before March, driven by demand from central banks and investors with new participants ranging from stablecoin issuer Tether to corporate treasurers.
BofA strategist Michael Widmer said expectations of further gains or portfolio diversification are driving the buying, with impetus from U.S. fiscal deficits, efforts to narrow the U.S. current account deficit and a weak dollar policy.
Philip Newman, managing director at Metals Focus, said further support stemmed from worries about U.S. Federal Reserve independence, tariff disputes and geopolitics including war in Ukraine and Russia's interaction with NATO countries in Europe.
For a fifth year running, central bank diversification of reserves from dollar-denominated assets should give a foundation for gold in 2026 as they buy when investor positioning is stretched, money rotates and prices fall, analysts said.
"The price level is supported much higher than where you started because you get that central bank demand coming through," said Gregory Shearer, head of base and precious metals strategy at JP Morgan.
"And then all of a sudden we're sitting above $4,000 in a much cleaner environment from a positioning perspective, which then allows the cycle to continue going forward," he said, referring to market signals used by investors to start extending positions again after de-risking.
JP Morgan analysts estimate that for prices to stay flat, quarterly central bank and investment demand of around 350 metric tons is needed. They forecast this buying to average 585 tons per quarter in 2026. Retailers are slashing prices on everyday essentials.
Investor holdings of gold as a share of total assets under management have risen to 2.8% from pre-2022 levels of 1.5%, JP Morgan's Shearer said, adding that while elevated, this was not necessarily a ceiling.
Morgan Stanley forecasts gold at $4,500 per ounce by mid-2026, while JP Morgan expects average prices at above $4,600 in Q2 and more than $5,000 in Q4 and Metals Focus forecasts gold at $5,000 by end-2026.
Global central bank umbrella body BIS said this month that a combination of gold and share prices soaring in unison is a phenomenon not seen in at least half a century - raising questions about a potential bubble in both.
Part of this year's gold buying was essentially a hedge against potential sharp corrections in equity markets, gold analysts said, fuelling a fire driven by tensions between historic allies over tariffs, global trade and war in Ukraine.
