CHENNAI: The World Gold Council (WGC)’s recent outlook suggests that gold could rise by 15–30 percent in 2026 from current levels, under certain conditions. The logic behind this bullish scenario rests on a confluence of factors that, if they persist, would reinforce demand for gold as a safe-haven asset. Key among these is the expectation of falling yields and a weaker dollar, which tend to make non-yielding assets like gold more attractive, a latest note from WGC said.
At the same time, the current backdrop of elevated geopolitical stress and global economic uncertainty boosts gold’s appeal as a hedge against risk. According to WGC, sustained strong investment demand — especially via gold exchange-traded funds (ETFs) — could more than offset softness in other demand channels (like jewellery or tech industries), providing a stable floor under prices even in volatile times.
WGC points out that global gold ETFs have already seen very large inflows in the current bull run. These inflows have added hundreds of tonnes to holdings this year; over a longer horizon (since mid-2024), cumulative ETF inflows remain well below what previous bull cycles saw, leaving potentially substantial room for further accumulation. That suggests that if investor appetite holds up or strengthens — especially with a shaky economic outlook or renewed uncertainty — gold could easily work its way toward the more optimistic end of WGC’s forecast range.
Yet the WGC also spells out a credible downside scenario. If global economic growth re-accelerates strongly — for example driven by fiscal stimulus or other macro tailwinds — then real yields could move up, the dollar could strengthen, and investor risk appetite could return. In such a situation, the opportunity cost of holding gold would rise, dampening demand. Risk-on sentiment might push capital back toward equities, bonds or other yield-bearing assets. Under this “growth recovery” scenario, gold prices could fall by 5–20 percent from current levels, wiping out some or even all of the gains seen recently.
That broad, scenario-driven view from WGC is echoed, and in some cases extended, by other major institutions. Some banks — notably HSBC — have suggested that gold could rally as high as $5,000 per ounce in 2026 if safe-haven interest remains strong. Others — such as Goldman Sachs — have projected a somewhat more modest but still substantial rise, targeting around $4,900 per ounce.
Taken together, these forecasts form a kind of envelope: on the bullish side, if economic and geopolitical uncertainty remains high and central banks/ETFs continue to buy, gold could see a strong rally in 2026. On the more optimistic end, $4,900–$5,000 per ounce is within reach. On the other hand, if macroeconomic conditions improve and yield-bearing assets regain favor, gold could retreat by a substantial amount.
For investors and policymakers this means the next year could be pivotal. Those holding gold — physically, through ETFs or other instruments — may be well positioned to benefit if uncertainty persists. But the reward isn’t guaranteed; the risk of reversal is material, and the path will likely be volatile. Monitoring real yields, dollar strength, central-bank buying patterns, and ETF flows will be critical to assessing which scenario might unfold.
According to a couple of analysts' reports, WGC’s 2026 outlook is not a promise of a strong rally but a calibrated assessment of possible paths. The range is wide — reflecting the uncertainty ahead — and the precise outcome will depend heavily on macroeconomic developments, investor sentiment and central-bank behavior.
