For the first time, the World Gold Council has issued a direct price forecast for gold's trajectory through the end of the year, predicting that the precious metal will trade near the $4,100 per ounce level under current global market conditions, a notable shift in the Council's methodology, which in previous reports merely presented scenarios and probabilities of rises and falls without specifying a particular price level.

In its report released Wednesday, the Council said that the second half of 2026 will be a decisive phase for the gold market, amid continued uncertainty stemming from geopolitical developments, the path of global interest rates, and shifts in investor sentiment, following a year that began with sharp and unprecedented volatility in many markets.

Issuing a specific price forecast reflects the Council's conviction that markets now have a relatively clearer view of the key variables driving gold movements, despite continued risks that could push prices away from this level in the event of major economic or geopolitical surprises.

A Volatile Year: War and Interest Rates Reshape Gold's Map

The report noted that geopolitical tensions, led by the Iranian war, were the biggest driver of gold's performance in the first half of the year, as they boosted demand for the precious metal as one of the most important safe havens in times of crisis.

It added that price movements were not only linked to geopolitical factors, but were also affected by investor repositioning and profit-taking after the record rally, while U.S. interest rate expectations and dollar movements played a variable role in influencing the performance of the yellow metal, as markets continued to reprice global monetary policy.

The report affirms that the relationship between gold and interest rates has become more complex recently, as the impact of monetary policy alone is no longer sufficient to explain price movements, given the growing weight of global political and economic risks.

Historic Volatility After Unprecedented Peaks

Gold experienced one of the most volatile periods in its modern history, hitting more than 12 record highs in the first months of the year and reaching an all-time peak of $5,405 per ounce in late January.

But these gains did not last long, as the precious metal underwent a sharp correction that pushed prices down to $4,002 per ounce in June, a clear reflection of changing investor expectations about interest rates and the dollar's strength.

These sharp moves resulted in gold falling about 7% since the start of the year, while average volatility rose to around 30%, a level reflecting the uncertainty gripping global markets.

This coincided with continued selling pressure during Wednesday's trading, as gold fell for the third consecutive session with the dollar's rise, after comments from Federal Reserve officials and growing expectations of interest rate hikes strengthened the U.S. currency, while investors continue to monitor developments in U.S.-Iran talks. Spot gold fell below $3,980 per ounce, after losses of more than 2% in the previous two sessions, hitting its lowest since last November.

Chemistry

Why Did the Council Choose the $4,100 Level?

The World Gold Council believes that the $4,100 per ounce level represents the price most consistent with current market expectations, especially given expectations that the Federal Reserve will implement at least one interest rate hike in 2026, expected by October, coinciding with continued tightening by major central banks and U.S. inflation peaking near 3.9% in the second quarter.

The report explained that the continuation of this economic environment means gold could move within a range of about 5% above or below $4,100 through year-end, making this level a balancing point between supportive and pressuring factors on the market.

This scenario reflects the Council's view that gold will not enter a sharp uptrend or downtrend unless economic conditions change fundamentally, whether through inflation surprises or a clear shift in central bank policies.

What Are the Main Risks That Could Pressure Gold?

The report identified three key factors that could limit gold's ability to recover in the second half of the year: continued strength of the U.S. dollar, faster-than-expected interest rate hikes by the Fed and other central banks, and improved investor appetite for high-risk assets such as stocks.

The Council added that continued trading below $4,000 per ounce could open the door to additional selling pressure in the near term, especially if accompanied by rising real yields on U.S. bonds.

However, the report stressed that any decline exceeding 10% from current levels could attract long-term buyers again, based on historical experience showing that large drops are often met with strong buying waves from strategic investors around the world.

The World Gold Council tied gold's return to an upward trajectory to fundamental changes in the global landscape, whether through a new escalation in geopolitical tensions, a slowdown in the global economy, or a shift by the Federal Reserve toward less restrictive monetary policy.

The report indicated that gold breaking above $4,500 per ounce will remain contingent on strong signs of weak global economic growth, prompting investors to return heavily to defensive assets.

The Council also noted that most of gold's daily price movement now occurs during Asian and U.S. trading sessions, reflecting the growing influence of Asian investors on global price trends, as they have become among the largest sources of demand for the precious metal.

Central Banks Continue to Support Gold

The report affirmed that central bank purchases remain one of the strongest structural supports for gold over the long term, having played a key role in the rally the metal has seen over the past three years, during which prices have more than doubled.

A survey conducted by the World Gold Council in cooperation with YouGov, covering 74 central banks, showed that 45% of these banks intend to increase their gold reserves in the coming year, the highest percentage recorded since the survey began in 2018, while only one central bank indicated an intention to reduce its holdings of the precious metal.

Another survey covering 66 central banks revealed that a majority of participants plan to continue buying gold over the next five years, indicating that it continues to be viewed as one of the most important strategic assets in official reserves, especially amid rising geopolitical tensions and growing concerns about the global financial system.

Gold Does Not Depend on Interest Rates Alone