Gold price outlook hinges on macroeconomic conditions as geopolitical risks, Asian demand gain influence

In the council’s ‘Gold Mid-Year Outlook 2026: Point break’ report, authors Juan Carlos Artigas, Taylor Burnette and Dr Fergus O’Connor have highlighted that the price of gold soared to record highs in January, crossing above $5 500/oz before dipping to below $4 000/oz in late June. Down roughly 7% since January, gold nonetheless ranks among the top commodity performers over the past year.

At current levels, the authors add, the gold price is broadly in line with the global backdrop of moderate growth, with elevated inflation and expectations of further, albeit limited, central bank tightening.

Under these conditions, they note that gold will likely stay relatively within range at about 5% but they remark that the stage is set for a possible breakout.

On the upside, clear catalysts, including a worsening economy, renewed geopolitical shocks, a shift towards lower interest rate expectations, or a wave of dip buying could reignite gold’s momentum and lift it back towards $4 500/oz or above.

Meanwhile, the authors also state that enduring central bank demand and policy shifts in key markets such as India are additional “wildcards” that could subtly influence gold’s path in the second half of this year.

The authors also highlight that the price of gold is currently down by 7% year-to-date, adding that the modest drop could mask a time of drastic changes.

Building on last year’s positive price momentum, gold set 12 all-time highs, surpassing $5 500/oz in late January amid heightened geopolitical risks and elevated options activity, before falling towards and briefly dipping below $4 000/oz in late June.

“The sharp price swing pushed realised volatility to more than 50%, alongside a broader rise in cross-asset volatility at the onset of the US-Iran conflict. Gold’s volatility has since come down below 30%, although it remains above its 20-year average of 17%.

“Despite the recent price pullback, gold is still one of the best performing assets of the last 12 months, with other assets playing catch-up,” the authors explain.

They also highlight the main drivers of the gold price performance being economic expansion, risk and uncertainty, opportunity cost and momentum.

In this regard, the authors explain that economic expansion supports gold jewellery buying, technology demand and long-term savings, risk and uncertainty increases the demand for gold as a hedge and a portfolio diversifier, opportunity cost makes gold more attractive as bond yields or currencies depreciate, and that momentum captures the impact of short term investment flows.

However, factors such as the strength of the dollar and interest rates rising beyond the current expectations, investor risk-on sentiment and other technical factors could bring further headwinds for the price of gold.

“In this context, our macro-based scenario analysis suggests that gold could resume its upward trend around $4 500/oz, but only a strong, clear signal may push it sustainably towards $5 000/oz," the authors highlight.