A report issued by the World Gold Council (WGC) stated that the current geo-economic uncertainty will determine the outlook for gold in 2026. Gold prices are broadly reflecting macroeconomic consensus expectations and may remain rangebound if current conditions persist. However, taking cues from this year, 2026 will continue to surprise. If economic growth slows and interest rates fall further, gold may see modest gains.

In a more severe downturn marked by rising global risks, gold could perform strongly. Conversely, a successful outcome of the policies set by the Trump administration will boost economic growth and reduce geopolitical risk, leading to higher rates and a stronger US dollar, which will push gold lower.

Additional factors such as central bank demand and gold recycling trends can also influence the market. Most importantly, gold’s role as a portfolio diversifier and source of stability remains key amid continued market volatility. Most importantly, gold’s role as a portfolio diversifier and source of stability remains key amid continued market volatility.

The WGC has prepared different scenarios for gold price movements. A combination of low interest rates and a weak dollar with rising risk aversion will create a continued supportive environment for gold. “Our analysis shows that, in this environment, depending on the severity of the economic slowdown and the pace and intensity of rate cuts, gold could rise 5% – 15% from current levels. This would represent a solid return in a normal year, but following a strong performance in 2025, it would still be considered a follow-worth note-up.” WC report said.

In another scenario, the combination of falling yields, elevated geopolitical stress and a pronounced flight-to-safety will create exceptionally strong tailwinds for gold, further supporting a sharp move. Under this scenario gold could rise 15% – 30% in 2026 from current levels. Investment demand, particularly through gold ETFs, will continue to be a key driver, offsetting weakness in other market sectors such as jewelery or technology. Rising prices have historically fueled, fueled, investor interest. Global gold ETFs have seen inflows of US$77bn so far this year, adding more than 700 tonnes to their holdings.

In the third scenario, rising yields, a strong dollar and a shift to risk-on positioning weigh heavily on gold, pulling back investor interest significantly. With hedges unwound and retail demand softening, the backdrop turns decidedly negative, resulting in gold prices recovering between 5% and 20% from current levels.

Gold ETF holdings may see continued outflows as investors shift to equities and higher yielding assets. Their intensity will be a function of the decline in the risk-induced premium on gold, which has been a mainstay since the invasion of Ukraine in 2022. However, historical analysis also shows that opportunistic buying by consumers and long-term investors can act as a buffer in this type of environment.

Despite this, a combination of high opportunity costs, risk-on sentiment and negative price momentum could create challenging conditions for gold, reinforcing this as the most bearish scenario in our view, the WGC added.