Gold bullion bars (Photo: David Gray)
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The price of gold has inched ever closer to the $5,000 per troy ounce mark in recent trading sessions, prompting many to wonder if the rally will continue any further.
On Friday, at 6:00am EDT, the COMEX gold futures contract for February delivery was trading at $4,930.70 / ozt, up 0.35% or $17.30. Overnight, spot gold prices in Dubai were in the range of $4,920 / ozt to $4,930 / ozt.
As ever, the latest spike is being driven by persistent geopolitical tensions leading to elevated safe haven trades by retail investors and central bank buying sprees.
Going For Gold: Central Banks And Retail Investors
On the latter point first, investors are flocking to the yellow metal and gold exchange traded funds, seeking a safe haven in a volatile world that’s having to contend with anxieties ranging from trade wars to physical conflicts like the grinding Russia-Ukraine war.
These trades come despite gold being a non-yielding asset, but admittedly a highly liquid one that has seen a staggering price appreciation in recent years.
In 2024, it ended 26% higher on an annualized basis. But if you thought that was spectacular, 2025 ushered in another 65% rise taking price levels to the yellow metal’s current trading range. It also marked the highest annual price rise for gold in percentage terms for over 45 years.
Central banks are being just as instrumental in driving prices higher as retail investors, if not more. According to the World Gold Council, the central bank of Poland continues to lead the buying spree, having been last year’s largest official sector buyer of the precious metal in the world.
Other prolific official sector buyers include the central banks of Brazil, China, Kazakhstan, Turkey and Russia. These elevated levels of gold purchases are also causing other subtle changes in the global market alongside gold price spikes.
In June 2025, the European Central Bank admitted that gold had overtaken the euro to become the world’s second-largest reserve asset for central banks. Only the dollar ranks higher as reserve asset.
There is wider belief in the market that by the end of 2026, data will likely indicate that gold reserves held by central banks may cap the 38,000 tonnes holding level last recorded in the mid-1960s and the historic highs of the post-World War II Bretton Woods era.
Forecasters Expect Gold Rally To Continue In 2026
With such a high level of interest in gold from individual as well as institutional buyers, many forecasters expect the rally to continue. With $5,000 / ozt already within sight, further upticks are now firmly part of the mood music.
Goldman Sachs has hiked its end-2026 gold price forecast by 10% to $5,400 /ozt, noting elevated buying by retail investors and emerging market central banks’ diversification into gold.
For J.P. Morgan Global Research $6,000 / ozt levels remain a distinct “possibility longer term.”
And ING recently noted: “U.S. President Donald Trump’s trade war is ongoing, geopolitical risks remain elevated, and ETF holdings continue to expand while expectations of more Federal Reserve rate cuts intensify, suggesting this bull run still has further to go.”
And further it does appear to be going. But that is not to rule out a price correction. As ANZ Bank notes, an easing of global geopolitical tensions may lead to a cooling in prices due to reduced safe haven demand. While many remain net buyers, central banks selling their gold reserves to cash in on high prices remains another risk.
But on balance the near-term bull case for gold remains stronger than the bear case. That’s because any downside would likely be limited given the resulting weakness in price may serve as a new magnet for attracting both retail as well as institutional buyers.
Disclaimer: The above commentary is meant to stimulate discussion based on the author’s opinion and analysis offered in a personal capacity. It is not solicitation, recommendation or investment advice to trade gold stocks, futures, options or products. Gold markets can be highly volatile and opinions in the sector may change instantaneously and without notice.