prices surge as rally heads towards US$5,000 in 2026, analysts forecast

Gold has hit multiple records in 2025, but analysts believe the rally is far from over, with some forecasting the yellow metal could climb to US$5,000 per ounce amid geopolitical tensions and a buying spree by central banks.

Spot gold broke through the US$4,500-per-ounce mark for the first time, reaching a record US$4,510 on Christmas Eve on Wednesday, which was 72 per cent higher than the end of last year, when it stood at US$2,624.

This was the biggest annual jump for the precious metal, exceeding the 70 per cent rise in 1979, according to Brian Fung, CEO of the Hong Kong Gold Exchange. The increase followed a 26 per cent surge in 2024.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Local prices rose in tandem, with gold in Hong Kong hitting a record HK$41,855 (US$5,382) per tael (37.51 grams) on Monday, according to the exchange.

Fung expected the rally to continue in 2026, with prices potentially hitting US$5,000 per ounce.

“The gold rally in 2025 was driven by expectations of interest-rate cuts, geopolitical tensions, and tariffs introduced by US President Donald Trump,” Fung told the Post. “Individual investors and central banks wanted to diversify away from US dollar assets, and gold became a safe-haven alternative.”

The Hong Kong government is rolling out big plans in 2026 to position the city as a global commodities trading hub. Photo: Shutterstock alt=The Hong Kong government is rolling out big plans in 2026 to position the city as a global commodities trading hub. Photo: Shutterstock>

He said all the factors supporting gold showed “no sign of disappearing any time soon, which is why prices are set to go up further in 2026”.

Goldman Sachs lifted its gold price forecast for December 2026 to US$4,900 per ounce, with analyst Lina Thomas citing strong structural demand from central banks and easing by the US Federal Reserve.

Morgan Stanley predicted US$4,500 per ounce by mid-2026, while Bank of America and JPMorgan both expected prices to surpass US$5,000 per ounce by the end of 2026.

Fung said central bank buying remained a major driver of the rally. “Central banks traditionally invest in US Treasuries and other US dollar assets,” Fung said. “But amid rate cuts and geopolitical tensions, they want to decrease their holdings in US dollar and gold has become a natural choice.”

In October, China reduced its US Treasury holding to its lowest level in 17 years, falling to US$688.7 billion from US$700.5 billion in September, according to US Treasury Department data.

At the same time, Beijing ­extended its gold-buying streak for a 13th straight month in November, adding 30,000 ounces to its reserves. That brought its total stock to 74.12 million ounces, worth US$310.6 billion, official data showed.

Amid the rally, the Hong Kong government is rolling out big plans in 2026 to position the city as a global commodities trading hub.

All the factors supporting gold – including tariffs and geopolitical tensions – show no sign of disappearing any time soon, according to some traders. Photo: EPA alt=All the factors supporting gold – including tariffs and geopolitical tensions – show no sign of disappearing any time soon, according to some traders. Photo: EPA>

This included plans to establish a gold central clearing system and a gold industry association, and to deepen cooperation with the Shanghai Gold Exchange to expand its influence in international gold pricing, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said on Monday.

The government’s newly formed Commodity Strategy Committee held its first meeting on Monday under Financial Secretary Paul Chan Mo-po, as Hong Kong looked to build a commodities ecosystem that would generate new growth beyond traditional finance.

“For investors, the question is not whether gold is ‘too high’, but what role it plays,” said Stephen Innes, a managing partner at SPI Asset Management.

“If gold is being treated as a short-term trade, then timing matters and patience is required,” he said. “But if gold is held as insurance against policy error, currency debasement, or systemic shocks, then price becomes secondary to purpose.”

Innes added: “You don’t buy insurance because it’s cheap; you buy it because the cost of not having it rises quietly until it’s too late. And this is the central bank footprint where buyers have become price-agnostic.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.