Gold approaches new highs.. Are we expecting levels of $5000 soon?

When reviewing the gold price trajectory during 2025, it becomes clear that the yellow metal has experienced a qualitative shift in investor perception. Gold is no longer just a traditional commodity; it has become a strategic safe haven amid a turbulent economic environment. Gold prices reached a historic peak of $4,300 per ounce in mid-October 2025, before naturally retreating toward levels of $4,000 in November, sparking lively discussions about the opportunities and tests that 2026 holds for this precious metal.

This rapid movement resulted from the convergence of multiple factors: a slowdown in global economic growth, a gradual shift toward more flexible monetary policies, and rising fears of financial and political crises. Investors recalculated their positions and flocked to safe assets, with gold leading their choices.

The Numbers Reveal the True Demand

Global demand for gold is no longer limited to jewelry and traditional industry. In Q2 2025, total demand reached 1249 tons, a 3% annual increase, but the real story lies in the 45% rise in total value, reaching $132 billion. The first quarter of the same year recorded demand of 1206 tons, the highest first quarter since 2016.

Exchange-traded gold funds played a pivotal role in this scenario, attracting substantial cash inflows that raised assets under management to $472 billion with holdings of 3838 tons, up 6% quarter-over-quarter. These holdings approached the all-time record of 3929 tons, a clear sign that individual and institutional investors are not ready to relinquish gold anytime soon.

Geographically, North America dominated demand with 345.7 tons, representing more than half of the global demand of 618.8 tons from the start of 2025 through September, followed by Europe with 148.4 tons and Asia with 117.8 tons.

Central Bank Purchases: The Main Support

What characterizes the current gold movement is the continued strong accumulation by central banks, unprecedented in scale. In Q1 2025 alone, central banks added 244 tons, a 24% increase over the five-year quarterly average. Recent statistics indicate that 44% of central banks worldwide now hold gold reserves, up from just 37% in 2024.

China, Turkey, and India led the buying spree, with the People’s Bank of China adding more than 65 tons, marking the 22nd consecutive month of net purchases. Turkey boosted its reserves to over 600 tons. This competition for gold reflects a growing desire to diversify reserves away from the US dollar and government bonds.

Supply: The Weak Link in the Equation

While demand rises, supply remains relatively limited. Gold mine production in Q1 2025 reached 856 tons, a slight decrease of 1% year-over-year. The gap between demand and supply widens further due to a 1% decline in recycled gold, as holders prefer to keep their gold amid expectations of continued price increases.

Production costs are steadily rising, with the global average extraction cost reaching around $1470 per ounce in mid-2025, the highest in a decade. This means that any expansion in production will be costly and slow, supporting the potential for continued upward pressure on prices.

Monetary Policy: The Main Driver

The US Federal Reserve cut interest rates in October 2025 by 25 basis points to a range of 3.75-4.00%, marking the second cut since December 2024. Official data hints at further reductions if the labor market weakens or economic growth slows.

Trader expectations on the Fed’s platform price in a further 25 basis point cut during the December 2025 meeting, making it the third cut of the year. BlackRock reports suggest that the Fed could target an interest rate of 3.4% by the end of 2026 in a moderate scenario.

This decline in interest rates reduces real yields on bonds, thereby increasing demand for gold as a non-yielding asset that offers genuine protection.

European and Asian Central Banks Follow Divergent Paths

Diverging monetary policies among major economies have deepened gold’s role as a global safe haven. While the US Federal Reserve moves toward flexibility, the European Central Bank remains cautious about inflation, and the Bank of Japan maintains its easing stance. This diversity has increased demand for precious metals as a hedge across different markets.

Inflation and Debt: Ongoing Risks

The World Bank forecasted in April 2025 that gold prices could rise by 35% during 2025. The International Monetary Fund issued a warning about global public debt, which exceeded 100% of GDP. This scenario pushes investors rapidly toward gold as a hedge against loss of purchasing power.

42% of major hedge funds increased their gold holdings during Q3 2025, according to Bloomberg Economics, reflecting a growing conviction of gold’s importance in investment portfolios.

Geopolitical Tensions: An Unexpected Catalyst

Trade conflicts between the US and China and Middle East tensions contributed to a 7% year-over-year increase in gold demand, according to Reuters. As concerns about Taiwan Strait disruptions and energy supplies escalated, gold prices surged above $3400 in July 2025.

Historically, geopolitical crises push gold to new levels quickly, and any new shock in 2026 could serve as an additional catalyst toward record highs.

The Dollar and Bonds: Dual Decline Supports Upside

The dollar index declined by about 7.64% from its peak at the start of 2025 to November 21, 2025. US 10-year bond yields fell from 4.6% in Q1 to 4.07% in November. This simultaneous decline enhances gold’s appeal to foreign investors and reduces the attractiveness of alternative yields.

Bank of America analysts see that if this trend continues with real yields stabilizing around 1.2%, it could support gold price expectations toward higher levels in 2026 and 2030.

What Do Experts Expect for Gold in 2026?

Major investment banks’ estimates converge around a certain range:

HSBC expects gold to reach $5,000 in the first half of 2026, with an annual average of $4,600, compared to an average of $3,455 in 2025.

Bank of America raised its forecast to $5,000 as a potential peak, with an average of $4,400, warning of a short-term correction if profit-taking occurs.

Goldman Sachs adjusted its outlook to $4,900, citing strong inflows into gold ETFs and continued central bank purchases.

J.P. Morgan forecasts gold reaching $5,055 by mid-2026.

The most common range among analysts is between $4,800 and $5,000 as peak levels, with an average annual price between $4,200 and $4,800.

Gold Price Outlook in the Middle East

The region has seen notable activity from central banks. The Central Bank of Egypt added one ton in Q1, and the Qatar Central Bank added 3 tons.

Gold price forecasts in Egypt suggest reaching 522,580 EGP per ounce in 2026, representing a 158.46% increase over current prices.

In Saudi Arabia, translating a $5,000 per ounce forecast at an exchange rate of (3.75-3.80), the price could approach 18,750 to 19,000 SAR.

In UAE, the same forecast could equate to around 18,375 to 19,000 AED per ounce.

These projections assume stable exchange rates and continued global demand without sharp economic shocks.

Potential Corrections: A Realistic Scenario

Despite overall optimism, major banks warn of a possible correction in the second half of 2026. HSBC anticipates a potential dip toward $4,200, should investors start profit-taking, but excludes a drop below $3,800 unless a significant economic shock occurs.

Goldman Sachs warned that sustained prices above $4,800 could pose a “credible test” for the metal’s price integrity.

However, J.P. Morgan and Deutsche Bank affirm that gold has entered a new price zone that is difficult to break downward, thanks to the strategic shift in investor perception of it as a long-term investment asset rather than a short-term speculative tool.

Technical Analysis Presents a Neutral Picture Currently

On November 21, 2025, gold closed at $4,065.01 per ounce, after touching a peak of $4,381.44 on October 20. The daily chart shows a breakout of the ascending channel, but the price still maintains the main upward trendline around $4,050.

The $4,000 support level remains strong; a clear daily close below could open the door toward $3,800 (Fibonacci retracement 50%). Resistance levels start at $4,200, followed by $4,400 and $4,680.

The RSI indicator remains around 50, indicating a neutral stance between selling and buying pressures. The MACD stays above zero, confirming the continuation of the long-term bullish trend.

How to Benefit from Gold Movements

There are several ways to capitalize on gold price movements:

• Physical purchase of bars or coins, a classic method but requiring storage and security.

• Gold ETFs provide high liquidity and ease of buying/selling without physical storage.

• Mining stocks offer exposure to gold with potential for profits and dividends.

• CFDs allow short-term trading with leverage but involve high risk and require deep risk management understanding.

Looking Ahead to 2030

While focusing on 2026, it’s worth noting that gold price forecasts for 2030 could be even more intriguing. If sovereign debt pressures and inflation persist, gold could see sustained demand until 2030, especially if governments fail to control borrowing or surprise with unexpected policies.

Summary

Gold prices in 2026 will reflect a delicate balance between two main factors: on one side, central banks and investors continuing to buy gold; on the other, the potential bursting of the high-price bubble at levels around $5,000.

If real yields continue to decline and the dollar remains weak, gold could reach new record levels. Conversely, if inflation unexpectedly drops and market confidence returns, the metal might stabilize without fully reaching the targeted levels.

What is certain is that gold will remain a key player in investment portfolios in the coming years, especially amid ongoing uncertainty about the economic and geopolitical future.