The new logic of gold prices in 2026: geopolitical risks become the primary factor, global central banks have been net buyers for 16 consecutive years, a "structural change" is underway

At the start of 2026, the global geopolitical and economic landscape continues to fluctuate, with financial market uncertainty remaining high, and gold once again becoming a focal point for investors worldwide. Although current international gold prices are showing a pattern of “rising sharply then pulling back, oscillating,” discussions about its future growth potential have never ceased.

Recently, Juan Carlos Artigas, CEO of the World Gold Council Americas and Head of Global Research, provided an in-depth analysis of the core drivers of the gold market in 2026 in an exclusive interview with the Daily Economic News (NBD).

He pointed out that gold is undergoing a “structural shift” driven by central bank gold purchases and risk aversion sentiment, and has become an indispensable liquidity safeguard in asset allocation.

Juan Carlos Artigas Image Source: X account

Pricing Logic Changes? The Truth Behind the Decoupling of Gold and U.S. Treasury Yields

NBD: You have long summarized gold price performance with four key drivers: economic expansion, risk and uncertainty, opportunity cost, and potential energy. In the current macro environment of 2026, which factor do you believe is the “main engine” for gold valuation?

Juan Carlos Artigas: Gold’s performance is always the result of the combined influence of these four factors. But in 2026, the further rise in risk and uncertainty is the primary factor supporting current valuations. Escalating geopolitical tensions and localized pressures in financial markets have significantly increased demand for high-quality safe-haven assets like gold.

Additionally, the current international situation has also put pressure on the dollar, thereby reducing the opportunity cost of holding gold. Finally, despite recent market volatility, gold’s steady price performance has attracted substantial investment cash flows, creating a positive growth momentum.

NBD: The traditional negative correlation between gold and the 10-year U.S. real yields has significantly weakened. Do you think this is just a temporary geopolitical deviation, or has there been a fundamental paradigm shift in pricing logic?

Juan Carlos Artigas: Gold prices are driven by multiple factors, not just real yields. Although the negative correlation appears to have weakened, this is mainly because other supporting factors—such as geopolitical risks, strong central bank gold buying, and a broader investor base—have offset the negative impact of rising real yields.

We believe that the relationship between gold and real yields has not disappeared. It’s just that, at this stage, other macro forces have become more critical drivers, reducing the dominance of real yields.

The trend of the US 10-year real yield and gold price (as a non-interest-bearing asset, gold’s past prices have been highly correlated with US real yields—when US real yields rise, gold prices tend to be pressured. However, this long-standing rule quietly failed after the Russia-Ukraine conflict in 2022: even with sustained high US real yields, gold prices soared.) Based on data from December 31, 2003, to May 30, 2025. Source: World Gold Council

16 Consecutive Years of Net Buying: Central Bank Gold Purchases Shift from “Phase” to “Structural”

NBD: After several years of record-breaking gold purchases, central bank buying slowed in 2025. Does this mean reserves have reached saturation? How will the global central bank gold buying trend evolve?

Juan Carlos Artigas: In fact, the fact that global central banks have maintained net purchases for 16 consecutive years is itself a major structural change in the gold market. Although the 2025 central bank gold purchase volume (863 tons) was below the record highs of over 1,000 tons annually from 2022 to 2024, it remains well above historical averages.

Our research shows that central banks favor gold because of its performance during crises, its anti-inflation properties, and its role as a store of value. Especially among emerging market central banks, gold is viewed as an important hedge against geopolitical risks.

Currently, the share of gold reserves in emerging market central banks’ foreign exchange reserves is about 15%, only half that of developed markets. This indicates significant growth potential in the future. We expect central bank demand for gold to continue.

NBD: With concerns over U.S. fiscal sustainability and debt levels intensifying, is gold shifting from a “complementary asset” to a “main competitor” for U.S. Treasuries as a high-quality liquid asset (HQLA)?

Juan Carlos Artigas: Although under Basel III, gold is not yet officially classified as a high-quality liquid asset (HQLA), its market behavior already exhibits characteristics of such assets.

During periods of market stress, gold demonstrates liquidity that even surpasses long-term U.S. Treasuries, including deep market depth, stable bid-ask spreads, and orderly trading amid volatility.

In today’s environment, an increasing number of reserve managers see gold as a reliable, non-sovereign alternative to enhance portfolio resilience and liquidity buffers.

Hedging “Stock and Bond Double Kill”: Gold as the “Ballast” in 2026 Diversified Portfolios

NBD: In a world of persistent inflation volatility, traditional 60/40 portfolios are struggling. According to the World Gold Council’s Quorum model, what is the optimal allocation of gold in a diversified portfolio in 2026?

Juan Carlos Artigas: It’s important to clarify that Quorum is a gold valuation framework, not an asset allocation optimizer. The optimal allocation depends on investors’ specific goals, risk appetite, and overall portfolio.

However, the Quorum model shows that in environments with increased volatility and higher market risk, gold tends to perform strongly.

Our asset allocation analysis indicates that, under various macro scenarios including inflation swings, gold has historically improved risk-adjusted returns by increasing diversification, reducing drawdowns, and enhancing long-term resilience—especially when stock-bond correlations rise.

(Note: Rising stock-bond correlation, often caused by inflation shocks or monetary tightening, diminishes the traditional diversification and hedging benefits of a 60/40 portfolio.)

NBD: What is the “ceiling” for gold prices in 2026 according to the World Gold Council’s forecasts?

Juan Carlos Artigas: The World Gold Council does not make price predictions. However, in our “2026 Gold Outlook,” we outline a range of hypothetical scenarios.

For example, if macroeconomic or geopolitical conditions worsen further, gold prices could be pushed higher; conversely, if geopolitical risks are gradually alleviated and interest rates rise further, gold’s performance might be limited.

NBD: In recent years, OTC purchases and unallocated gold accumulation have surged significantly. How is the World Gold Council improving its methodology to capture this “hidden” demand? Is OTC more influential than traditional ETFs in global spot pricing?

Juan Carlos Artigas: OTC trading is inherently difficult to quantify directly. In our “Gold Demand Trends” report, we infer OTC demand from the difference between supply and demand that can be measured, supplemented by trade flows, inventory data, and derivatives market activity.

While at certain times—such as large institutional or sovereign transactions—OTC liquidity can have a significant impact on prices, the gold market is composed of a diverse set of participants: jewelry consumers, technology sectors, various investors (through bars, coins, ETFs, and vault holdings), and central banks. Over the long term, it is the collective actions of all these participants that ultimately determine gold’s performance.

(Article source: Daily Economic News)