The primary target of this move lies near the upper boundary of the extension channel, marked by the red dotted trendline around the $5,000 level. A sustained break above $5,000 would likely open the door for a further advance toward the $6,000 region. Therefore, the medium‑term price target for gold remains in the $5,000–$6,000 range.
Gold’s 2026 Outlook: Momentum, Macro Forces, and Supporting Factors
Parabolic Momentum and Recession Scenarios
The gold market enters 2026 with most bullish macro factors already priced in. The market has digested expectations for moderate U.S. rate cuts and a broadly weaker dollar. However, the market has entered a parabolic move, which typically lasts longer and yields substantial gains. Moreover, the fundamental factors persist and remain unresolved.
There are possibly two paths where gold could outperform:
- Shallow Economic Slip: If global growth slows modestly and the Fed delivers more cuts, gold could gain strongly as investors rotate into defensive assets and volatility increases.
- Doom Loop Recession: In a deeper downturn, where economic activity contracts sharply and central banks resume aggressive easing, gold could even perform more, as a flight to safety would fuel renewed demand.
The above scenarios remain valid based on the fragility of the U.S. labour market and persistent trade tensions. Moreover, the central banks remain in a difficult position as cutting too little risks stagnation, while cutting too much risks inflation. However, any path will strengthen gold’s role as a hedge in 2026.
Supporting Factors for Gold Surge in 2026
The structural tailwinds are expected to continue supporting gold in 2026. Central bank purchases remain strong, with emerging markets actively diversifying away from the U.S. dollar and increasing their gold reserves beyond pre-pandemic norms.
At the same time, institutional investors remain underexposed to gold, creating the potential for rebalancing flows to further support prices. As market volatility persists, gold’s role as a portfolio hedge remains highly attractive. It offers protection without credit or yield risk.
Another supporting factor for gold is the breakdown in the US dollar index from the long-term pivotal area. It is observed that the U.S. dollar is trading near a long-term pivotal zone. A decisive breakdown from this area could trigger a significant drop toward the 90 level, which would likely support the ongoing gold rally and accelerate momentum toward the $6,000 mark.
