By Ashita Sivaprasad and Kavya Balaraman
Jan 26 (Reuters) – Analysts expect spot gold prices to rise to another $6,000 this year after hitting a record high above $5,000 an ounce on Monday due to global tensions as well as strong central bank and retail demand.
Gold rose to a high of $5,092.70 as geopolitical and economic risks rattled the market. The safe-haven metal is up more than 17% this year, after rising 64% in 2025.
The London Bullion Market Association’s annual Precious Metals Forecast Survey predicts that gold will hit $7,150 in 2026 and average $4,742.
Goldman Sachs increased its December 2026 gold price target to $5,400 from $4,900.
Independent analyst Ross Norman expected a high of $6,400 this year, with an average of $5,375.
“The only certainty right now seems to be uncertainty, and that’s playing very much into gold’s hands,” Norman said.
Geopolitical tensions
Gold’s recent rally has been fueled by geopolitical tensions, US-NATO friction over Greenland and growing doubts over the US Federal Reserve’s independence from tariff uncertainty, among others.
“With the upcoming US midterm elections, political uncertainty may increase further. At the same time, continued concerns about overvalued equity markets are likely to strengthen portfolio diversification flows into gold,” said Philip Newman, director of Metals Focus. [MKTS/GLOB]
“After crossing the $5,000/ounce milestone, we expect further upside,” he added.
Strong central bank purchases
Central bank gold purchases, the main driver of prices in 2025, are expected to remain strong this year.
Goldman Sachs estimates that emerging market central banks will buy an average of 60 metric tons a month as they diversify reserves into gold.
Poland’s central bank, which has 550 tonnes of gold at the end of 2025, aims to increase reserves to 700 tonnes, Governor Adam Glapinski said this month.
These plans suggest that the main driver behind gold’s rise is central banks “trying to dollarize … and where else can you go but gold?” reaffirms the notion that Norman said.
China’s central bank extended its gold-buying program for a 14th month in December.
ETF flows, retail demand
Inflows into gold-backed ETFs, which store bullion for investors and account for the bulk of investments in the metal, are also driving down prices as markets expect more U.S. rate cuts this year.
“There is an opportunity cost to holding gold that has no yield. As interest rates fall, this opportunity cost also increases. If the Fed continues to cut rates in 2026, demand for gold should increase,” said Chris Mancini, co-portfolio manager at the Gabelli Gold Fund.
