Could gold reach $5,000 per ounce in 2026?

Gold has recovered most of the losses it experienced during a steep decline in late October, climbing back to record levels by the end of December.

The precious metal hit a new all-time peak on December 29, marking its best year since 1979 with a 64% rise in 2025 and an increase of nearly 140% since early 2023.

“Gold hit new record highs in late December, fueled by demand for tangible assets amid a weak US dollar, geopolitical tensions, uncertainty among institutions, and low seasonal liquidity,” UBS strategists led by Giovanni Staunovo stated in a report.

Despite the magnitude of the recent rally, UBS maintains that the fundamental conditions continue to support further gains in gold for 2026. The strategists highlight a significant drop in U.S. real interest rates, which they describe as “the opportunity cost of holding non-yielding assets like gold,” currently at its lowest point since mid-2023.

Additionally, demand from both investors and central banks remains close to record levels, while ongoing concerns about rising government debt in advanced economies continue to boost gold’s appeal as a store of value. These factors collectively support expectations for new record highs next year.

“Our outlook for gold remains positive,” the strategists stated, having recently increased their gold price target for March 2026 to $5,000 per ounce.

“We believe gold’s function as a diversifier and hedge remains strong. For investors who favor this asset class, we recommend a mid-single-digit allocation to gold within a diversified portfolio,” they added.

Recent geopolitical developments have strengthened gold’s reputation as a safe-haven asset. UBS pointed out the unexpected U.S. military capture of Venezuelan President Nicolas Maduro last weekend, which caused widespread market reactions.

The bank also notes that ongoing structural demand trends continue to support gold. UBS strategists anticipate central bank gold purchases will total between 900 and 950 metric tons in 2025, just shy of the previous year’s record.

They project total global gold demand to reach approximately 4,850 metric tons, which would be the highest since 2011.

In addition, UBS highlights the sharp increase in government debt among advanced economies, expected to hit around 110% of GDP this year—up from about 75% twenty years ago—and forecasted to rise to about 118% by the decade’s end, according to the International Monetary Fund.

Separately, HSBC commodity strategists predict gold prices could reach $5,000 as early as the first half of 2026.

“We expect prices to trade at or near $5,000 per ounce in the first half of 2026. However, it is possible that the rally may lose momentum as the year progresses,” strategist James Steel wrote in a note.

Sources: Investing