Gold outlook 2026: Yellow metal may see short-term moderation after stellar rally; long-term bullish view intact
After one of its strongest rallies in decades, gold prices may take a breather in 2026, though the long-term outlook remains firmly bullish, analysts at ICICI Direct said on Tuesday.The report noted that US Federal Reserve rate cuts are expected in 2026, ongoing concerns over rising global debt, and questions over long-term Fed independence will continue to make gold an attractive hedge against macroeconomic uncertainty. “Concerns over Fed independence will be supportive. There are fears in the market that next Fed chair candidate would push for lower interest rate,” the report said, as per news agency ANI.ICICI Direct expects strong downside protection for the metal, with prices unlikely to fall below the $3,500-3,600 range even during a corrective phase. On the upside, gold could test $4,800-5,000 if macroeconomic risks intensify or the dollar weakens further.Gold surged over 60% in 2025, reaching record highs as US rate cuts, aggressive central bank buying, geopolitical tensions, and concerns about US fiscal stability drove investors toward safe-haven assets. The sharp rise has made the metal vulnerable to short-term profit-taking, though analysts do not expect a significant correction.“Any moderation is likely if geopolitical risks ease or global trade tensions cool. Progress toward peace between Russia and Ukraine or stabilisation in US trade policy could reduce the risk premium embedded in gold prices,” the report said.Structural support for gold remains strong, underpinned by sustained central bank purchases, which have averaged roughly 1,000 tonnes annually since 2022. Gold is now emerging as the world’s second-largest reserve asset after the US dollar. Additionally, inflation concerns, high government debt, and rising investment in ETFs are expected to continue supporting prices, along with potential weakness in the dollar.While prices may moderate in 2026, gold’s role as a hedge and safe-haven asset is expected to remain strong.
