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Gold has experienced a volatile 2026. After surging above $5,500/oz in January, it pulled back below $4,000/oz in June before stabilising.
Have prices bottomed? We believe the answer is a qualified yes, though the path higher will likely be grinding rather than explosive. Rising long-maturity bond yields remain a key hurdle, but robust central bank demand continues to anchor gold as a core portfolio holding.
Official-sector buying provides gold’s strongest structural support. The World Gold Council’s 2026 survey shows 89 per cent of central banks expect global official reserves to rise over the next year, with a record 45pc planning to add to their own holdings. This ongoing drive to diversify reserves creates a firm floor against deeper price pullbacks.
Rising bond yields present the primary obstacle to a sharper rally. The US 30-year Treasury yield sits near a 19-year high, while global long-term yields across the UK, Euro area, and Japan are surging amid debt and inflation concerns.
Because gold yields no income, higher real yields increase the opportunity cost of holding the metal, setting a higher return threshold for investors. While central bank buying broke this traditional inverse relationship after 2022, high yields have recently reasserted themselves as a key headwind.
Counterbalancing yield pressures are persistent geopolitical tensions, fiscal deficits, and broader market volatility, all of which sustain safe-haven demand. Additionally, a gradually weakening US dollar should provide a modest tailwind, while the mid-year pullback successfully flushed out excessive speculative positioning.
We maintain a positive view on gold as a strategic multi-asset holding. Durable official-sector demand and safe-haven buying offset the pressure of elevated yields, pointing toward a steady, moderate trajectory. We project gold prices to grind higher towards $4,600/oz over the next 6-12 months.
(The author is chief investment officer for Africa, Middle East and Europe at Standard Chartered Bank’s Wealth Solutions unit)
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