Gold Prices Set for Strong Rise - 15% to 30% by 2026, Says WGC
Global economic and geopolitical tensions - including the Israel–Middle East conflict, the Russia–Ukraine war, and the ongoing China–US rivalry - have created an atmosphere of uncertainty. During such times, investors avoid risky markets like equities and turn to safer assets. This shift has significantly boosted the demand for gold, driving its price upward.
Adding to this trend, major central banks across the world have been purchasing gold in large quantities. Countries such as the United States, China, and Russia have steadily increased the gold reserves held by their central banks. This accumulation is seen as a major factor contributing to the surge in global gold prices.
Rising Demand Through Investment Plans
Investor interest in gold-linked investment options, including Gold ETFs, has also risen sharply. With interest rate announcements and aggressive gold buying by central banks, gold prices have climbed to record levels.
So far, gold prices have surged by nearly 53%, influenced by these global economic signals.
Will Gold Prices Fall by 20%?
However, this upward trend may not continue in the coming year. According to the World Gold Council, gold prices could decline by 5% to 20% in the next year.
If former US President Donald Trump’s economic policies deliver faster-than-expected growth in the United States, inflation may rise. In such a scenario, the US Federal Reserve may be forced to increase interest rates.
Higher Interest Rates Could Bring Gold Down
When interest rates rise, the US dollar typically strengthens. A stronger dollar often leads to a decline in gold prices. Investors may then shift from gold to other investment options — such as the stock market - that promise higher returns. This movement of funds could trigger a rapid fall in gold prices.
Expert Advice: Be Cautious
Experts warn that gold prices are highly sensitive and can move both upward and downward quickly. They advise buyers to remain cautious and make informed decisions before investing in gold.
