When will the price of gold drop? 2025-2026 forecasts and real investment opportunities

Current picture: Has gold reached its peak?

The precious metal experienced an extraordinary rise in 2025, with prices surpassing 50% since January, reaching a historic peak of $4,381 per ounce in mid-October, thus exceeding major investment institutions’ expectations. Now, the pressing question among investors: Will this bullish wave continue or is a noticeable correction on the horizon?

What drove gold prices to these levels?

This surge didn’t come out of nowhere. Throughout 2025, multiple factors supported the metal:

Factor One: Weak US Dollar
A weak dollar makes gold cheaper for foreign buyers, boosting global demand. This trend persisted throughout the year, especially with expectations of US interest rate cuts.

Factor Two: Safe haven during turmoil
Geopolitical tensions and economic uncertainties pushed investors toward gold as a risk hedge. Concerns over global conflicts and unpredictable policies strengthened this demand.

Factor Three: Central bank purchases
Global reserves continued accumulating gold, especially from emerging markets. This systematic buying exerted ongoing upward pressure on prices.

Factor Four: Inflation and search for protection
The global inflation rate, slightly above 3%, prompted individuals and institutions to seek assets that preserve value.

Price journey during 2025: from 2,798 to 4,381 dollars

Data tells a clear story: a rapid rise, especially in the third and fourth quarters.

Experts’ forecasts: where is gold headed in 2026?

Predictions vary but revolve around a specific range:

J.P. Morgan expects an average of $5,000 by 2026, with a possibility of reaching $4,900 in the last quarter.

Goldman Sachs sees multiple scenarios: reaching $4,000 mid-year, with an optimistic scenario up to $4,900.

Morgan Stanley forecasts $4,500 by mid-2026, supported by physical demand from funds and banks.

Standard Chartered expects $4,300 by the end of 2025, and $4,500 within 12 months.

Bank of America sets a target at $4,000 for Q3 2026.

HSBC looks toward $5,000 by 2026.

ANZ predicts $4,400 by the end of 2025, and $4,600 in mid-2026.

Is a downturn coming? Corrective factors

Despite positive forecasts, there are possibilities for a price correction:

1. Shift in Federal Reserve policy
If US interest rates rise instead of falling, gold may lose some of its appeal. Traders might shift to fixed-income assets.

2. Reduction in geopolitical tensions
If global crises truly ease, demand for safe havens could decline, putting downward pressure on prices.

3. Change in investor preferences
A mass exit from gold toward tech stocks or emerging markets could trigger a correction.

4. Unexpected dollar appreciation
A recovery of the US dollar could make gold more expensive for foreign buyers, reducing demand.

Fundamental factors governing gold prices

Understanding these factors is essential for any investor:

Inflation and purchasing power
Historically, gold preserves its value when inflation rises. In 2021-2022, with inflation exceeding 5-6%, gold served as a refuge, reaching $1,900.

Dollar exchange rate
A clear inverse relationship: weak dollar = strong gold. In 2020, when the dollar weakened due to stimulus packages, gold jumped above $2,075.

Central bank decisions
Central banks hold about 25% of the world’s gold. Any change in their purchasing policy directly impacts the market.

Demand via ETFs
Funds like SPDR Gold Shares (GLD) saw massive inflows in 2020, totaling 700 tons, contributing to the rise to $2,075.

Actual demand from jewelry and industry
India and China consume about 50% of global gold for jewelry. Wedding season in India, for example, boosts global prices.

Mine supply
Disruptions in supply chains or increased environmental costs may restrict production, supporting prices.

Practical investment strategies: how to move?

Long-term investment: safety before profit

This option targets investors seeking capital protection:

Available tools:

• Buying physical gold bars and coins directly
• Gold-backed investment funds
• Mining company stocks

Advantages:

• Safe haven during crises
• Inflation hedge over the long term
• No need to worry about timing

Challenges:

• Physical gold requires storage and security
• No regular income like stocks
• May take years to see tangible results

Short-term investment: volatility as opportunity

This path is for active traders:

Available tools:

• Gold futures contracts
• CFDs (Contracts for Difference)
• Specialized ETFs

Mechanism:
Instead of buying physical gold, predict the price direction:

• If expecting an increase: open a buy position
• If expecting a decrease: open a sell position

Profit or loss depends solely on the price difference.

Advantages:

• Quick profits from volatility
• Leverage amplifies returns
• No need to own physical gold

Warning:
Leverage also multiplies losses. For example, with 1:100 leverage and $1,000 margin, you open a $100,000 position. A 1% move up = $1,000 profit. A 1% move down = $1,000 loss.

Comparison table: which options suit you?

Practical tips before investing

1. Clearly define your goal
Are you protecting against inflation? Diversifying your portfolio? Quick gains? Your answer determines your strategy.

2. Understand your risk tolerance
Gold can drop 10% in weeks. Can you accept that?

3. Don’t put all eggs in one basket
Gold should be part of a diversified portfolio, not all your investment.

4. Monitor inflation and US interest rates
These indicators shape gold’s short- and medium-term trend.

5. Be patient and disciplined
Daily volatility may tempt emotional decisions. Stick to your original plan.

Conclusion: Gold in 2026 between optimism and caution

Experts’ forecasts point to a range of $4,000 to $5,000 per ounce in 2026. This suggests further potential upside from current levels but not unlimited.

Real downturn possibilities exist: changes in Fed policy, geopolitical calm, or shifts in investor preferences. Therefore, wisdom lies in smart investing, good diversification, and deep understanding of your actions.

Gold has never been a quick-rich scheme but a wealth preservation tool. Those who grasp this difference will make the right decision at the right time.