With spot gold prices clearing another milestone by hitting a record high above $5,000 per ounce on Monday, analysts expect the run could extend further toward $6,000 this year, on mounting global tensions as well as strong central bank and retail demand.
Spot gold was up 2.1% at $5,087.39 an ounce by 10:30 a.m. GMT after hitting a record $5,110.50 as geopolitical and economic risks rattled markets. The safe-haven metal is already up about 18% this year, after soaring 64% in 2025, for its biggest annual gain since 1979.
The London Bullion Market Association's annual precious metals forecast survey shows analysts projecting gold rising as high as $7,150 and averaging $4,742 in 2026.
Goldman Sachs has raised its December 2026 gold price forecast to $5,400 from $4,900.
Independent analyst Ross Norman expects a high of $6,400 this year, with an average of $5,375.
"The only certainty at the moment seems to be uncertainty, and that's playing very much into gold's hands," Norman said.
U.S. President Donald Trump and the uncertainty he creates on multiple levels remain the main driver of surging prices and investment momentum driven by a fear of missing out, said Ole Hansen, head of commodity strategy at Saxo Bank.
In his latest tariff threats, Trump said on Saturday that he would impose a 100% tariff on Canada if it follows through on a trade deal with China.
Meanwhile, the yen hit a two-month peak against the dollar as speculation grew over possible U.S.-Japan intervention while investors also unwound dollar positions ahead of this week's Federal Reserve (Fed) meeting and possible announcement of a new Fed chair.
The recent rally has also been fueled by other geopolitical tensions, from the U.S.-NATO friction over Greenland to rising doubts over the independence of the Fed, among others.
"With the upcoming U.S. mid-term elections, political uncertainty may increase further. At the same time, persistent concerns about over-valued equity markets are likely to reinforce portfolio diversification flows into gold," said Philip Newman, a director at Metals Focus.
"After crossing the $5,000/ounce milestone, we expect further upside," he added.
Central-bank gold buying, a key driver of prices in 2025, is expected to stay strong this year.
Goldman Sachs forecasts purchases to average 60 metric tons a month as emerging-market central banks continue diversifying reserves into gold.
Poland's central bank, which held 550 tons of gold at end-2025, aims to lift reserves to 700 tons, Governor Adam Glapinski said this month.
These plans reaffirm the view that the key driver behind the spike in gold is central banks "looking to de-dollarise ... and where else could you go except into gold?" Norman said.
China's central bank extended its gold-buying spree for a 14th month in December.
Inflows into gold-backed ETFs, which store bullion for investors and account for a significant amount of investment demand for the metal, are also underpinning prices as markets expect further U.S. rate cuts this year.
"There's an opportunity cost to holding gold, which has no yield. As interest rates decline, so does this opportunity cost. If the Fed continues to lower rates in 2026, demand for gold should rise," said Chris Mancini, co-portfolio manager of the Gabelli Gold Fund.
Gold ETFs saw record inflows in 2025, led by North American funds, according to World Gold Council data, with annual inflows surging to $89 billion. In tonnage terms, inflows totaled 801 metric tons, the highest since their record in 2020.
Gold demand for jewelry has weakened amid high prices, partly offset by a strong appetite for small bars and coins in key markets such as India.
Bar-and-coin buying is also evident in Europe, though some investors are taking profit, analysts said.
For many retail investors, gold's appeal lies in its simplicity, said Frederic Panizzutti, global head of sales at Numismatica Genevensis, which trades precious metals coins.
"Your only risk with physical gold is the price direction. And as geopolitics and geoeconomics have become more complicated ... that simplicity has become more attractive."
Analysts say several factors could trigger a correction, including a pullback in U.S. rate-cut expectations, margin calls in equities, and easing concerns about Fed independence.
However, most expect any pullback to be short-lived and treated as a buying opportunity.
"A meaningful and sustained decline in gold would require a return to a more stable economic and geopolitical backdrop, which currently appears unlikely," Newman added.
