Gold outlook 2026 hinges on global uncertainty as WGC warns of sharp swings

The ongoing geo-economic uncertainty will decide the outlook of gold in 2026, according to a report released by the World Gold Council (WGC). The gold price broadly reflects macroeconomic consensus expectations and may remain rangebound if current conditions persist. However, taking cues from this year, 2026 will likely continue to surprise. If economic growth slows and interest rates fall further, gold could see moderate gains.

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

Additional factors, such as central bank demand and gold recycling trends, could 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.

WGC has worked out different scenarios for gold price movement. The combination of lower interest rates and a weaker dollar paired with heightened risk aversion would create a continued supportive environment for gold. “Our analysis shows that, in this environment, gold could rise 5% – 15% in 2026 from current levels, depending on the severity of the economic slowdown, and the speed and magnitude of the rate cuts. This would represent a solid return in a normal year, but following 2025’s strong performance, it would still be considered a noteworthy follow-up,” the WGC report said.

In the second scenario, the combination of falling yields, elevated geopolitical stress and a pronounced flight-to-safety would create exceptionally strong tailwinds for gold, supporting a sharp move higher. Under this scenario gold could surge 15% – 30% in 2026 from current levels. Investment demand, particularly via gold ETFs would remain a key driver, offsetting weakness in other areas of the market, such as jewellery or technology. Rising prices have historically spurred investor interest, accelerating momentum. Global gold ETFs have seen US$77bn of inflows so far this year, adding more than 700 tonnes to their holdings.

In the third scenario, rising yields, a stronger dollar, and the shift toward risk-on positioning weigh heavily on gold, prompting a notable withdrawal of investor interest. With hedges unwound and retail demand softening, the backdrop turns decidedly negative, resulting in a gold price correction of between 5% and 20%, from current levels.Gold ETF holdings could see sustained outflows as investors rotate into equities and higher-yielding assets. Their magnitude would be a function of the reduction in gold’s risk-induced premium, which has been a mainstay since the invasion of Ukraine in 2022. However, historical analysis also shows that opportunistic buying from consumers and long-term investors could act as a buffer in this kind of environment.Despite this, the combination of higher opportunity costs, risk-on sentiment, and negative price momentum could create challenging conditions for gold, reinforcing this as the most bearish scenario in our outlook, WGC added.