Gold Price Scenarios for the Second Half of 2026

The World Gold Council expects gold to trade in a price range of 5% upside or downside around $4,100 per ounce during the second half of the year, but noted that this outlook remains subject to change if strong catalysts emerge, such as geopolitical shocks or a shift in interest rate expectations.

The report "Gold Outlook H2 2026: A Turning Point" explained that gold hit record levels above $5,500 per ounce in January, before falling below $4,000 in late June, posting a decline of about 7% since the start of the year. Despite this, it remains among the best-performing assets over the past year.

The report's authors believe the current price is in line with the global economic backdrop of moderate growth and high inflation, with expectations of further limited monetary tightening by central banks.

Performance Drivers

The "Gold Return Attribution Model" showed that the high-risk environment has been the main driver of performance since the start of the year, with geopolitical risks and market volatility contributing 17% to price changes, while the impact of opportunity cost (between interest rates and the dollar) was mixed, reflecting ongoing market repricing of these factors.

Asia's Role

The analysis confirmed that the bulk of gold price movements are closely linked to trading activity in Asian and US markets, with profit-taking tending to occur during US trading hours, while price rebounds often happen during Asian sessions.

Election Impact

Markets are awaiting the results of the US midterm elections in November 2026, and expectations point to a possible split Congress, with Democrats potentially regaining control of the House while the Senate remains under Republican control. The political uncertainty surrounding these elections could support demand for gold as a hedging tool.

Downside Risks

On the other hand, gold prices face downward pressure if the dollar remains strong or if interest rates exceed current expectations. Prices could see a decline of up to 15%, but the analysis suggests that any drop of this magnitude often finds support from bargain buying, limiting a sharp decline.

Central Banks

The analysis indicates that historically, an increase in central bank purchases of between 20 and 30 tons above average translates into a 1% rise in the gold price.

India's Dilemma

Since April 2026, the Indian government has resorted to austerity measures, most notably raising customs duties on gold imports to 15% from 6% to counter pressure on the local currency. Estimates suggest that these duties alone could reduce gold demand in India by about 10% annually, which is believed to be already priced into the market.

Source: World Gold Council

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