Are Gold Prices Expected to Fall? A 2025-2026 Outlook

Are Gold Prices Expected to Fall: Gold has long been the ultimate safe-haven asset, a glittering hedge against economic turmoil, inflation, and geopolitical strife.

As of today, 2025, spot gold trades around $3,670 per ounce, up nearly 40% year-to-date after shattering records above $3,500 in April.

This meteoric rise—fueled by central bank hoarding, ETF inflows, and a weakening U.S. dollar—has investors wondering: Is the party over? Are prices poised to plummet, or will the bull run charge into 2026?

The consensus from analysts, banks, and market data leans bullish, with most forecasts pointing to sustained highs or further gains. However, pockets of caution suggest short-term pullbacks.

The Bullish Backdrop: Why Gold Is Defying Gravity

Gold’s rally isn’t a fluke; it’s rooted in structural tailwinds that show no signs of abating. Central banks, the metal’s biggest buyers, are on a diversification spree.

In 2025 alone, they’ve snapped up over 900 tonnes—more than double pre-2022 averages—with powerhouses like China, India, and Turkey leading the charge.

This demand, averaging 710 tonnes quarterly, stems from de-dollarization fears and rising U.S. debt levels, now exceeding $35 trillion. J.P. Morgan Research attributes much of the surge to this “structural bull case,” forecasting prices to average $3,675 by Q4 2025 and climb to $4,000 by mid-2026.

Investor appetite is equally voracious. Gold ETFs like SPDR Gold Shares (GLD) hold over 31 million ounces worth $90 billion, with inflows accelerating amid recession jitters.

As the Federal Reserve signals more rate cuts—potentially 100 basis points by year-end—real yields on bonds are tumbling, making yield-less gold more attractive.

A softer dollar, down 2.2% in the past month, amplifies this: Gold is priced in USD, so a weaker greenback boosts affordability for foreign buyers.

Geopolitics adds rocket fuel. Ongoing conflicts in Ukraine and the Middle East, plus U.S.-China trade tensions under President Trump’s tariff threats, keep risk aversion high.

The World Gold Council notes that “persistent geopolitical risk” has driven a 26% YTD gain, with stagflationary pressures (sticky inflation at 2.7% plus subpar growth) favoring gold as a portfolio diversifier.

Even as consumer demand cools—jewelry sales dipped due to high prices—recycling and industrial use (electronics, EVs) provide a floor.

These factors create a virtuous cycle: High prices curb supply inflation (annual mine output ~3,000 tonnes), tightening the market and propping up values.

Expert Forecasts: Mostly Up, With Modest Dips

Wall Street’s crystal ball is predominantly optimistic, though not without nuance. J.P. Morgan’s $4,000 mid-2026 target assumes robust central bank buying and ETF rotations from overvalued stocks.

Goldman Sachs echoes this, eyeing $3,700 by December 2025, potentially $3,880 in a recession. UBS projects $3,700 by late 2026, citing U.S. economic strains, while Bank of America raised its 2025 average to $3,063 (from $2,750) and 2026 to $3,350, thanks to trade policy uncertainty.

Independent forecasters align. InvestingHaven targets $3,800 in 2025 and $4,200 in 2026, with a peak of $5,155 by 2030, driven by synchronized CPI and gold uptrends.

CoinPriceForecast sees $4,119 by end-2025 (+56% YoY) and $4,400 in 2026. LongForecast predicts fluctuations but a year-end close at $3,170 for September 2025, implying mild consolidation.

Yet, not all views are rosy. LiteFinance aggregates mixed signals: Most expect a slide to $3,211-$3,293 by December 2025, though optimists like CoinCodex see $3,670. HSBC, more cautious, forecasts $3,175 end-2025 and $3,025 in 2026, warning of volatility in a $3,100-$3,600 range. Citi and HSBC highlight potential pullbacks if inflation cools faster than expected.

This table underscores the tilt: Average projections hover around $3,500+ for late 2025, with upside risks outweighing downs.

Risks of a Fall: When the Shine Dims

While a collapse isn’t on the horizon, short-term dips are plausible. A “bear case” from Savvy Wealth pegs $3,200 by year-end if inflation sticks at 2.7%, the dollar firms (up 0.5% recently), and yields rise, delaying Fed cuts.

CBS News highlights easing geopolitics or stronger U.S. jobs data (August nonfarm payrolls beat estimates) pulling capital to equities.

The Economic Times notes a May 2025 drop from $3,500 to $3,211 on trade talk hopes and robust jobs, a 8% correction.

Supply shocks could exacerbate: If recycling surges (up 10% in H1 2025) or mining output hits 3,500 tonnes annually, excess could pressure prices.

High valuations—gold’s inflation-adjusted peak rivals 1980—invite profit-taking. World Gold Council warns of 12-17% givebacks if conflicts resolve improbably.

Still, these are tactical: Historical pullbacks (e.g., 2021’s 20% drop) rebound swiftly in uncertain times. BullionVault’s investor survey flags geopolitics (31%) and monetary policy (17%) as top 2025 influencers, minimizing fall odds.

Investor Implications: Navigate, Don’t Panic

For portfolios, gold’s role endures. At 5-10% allocation, it hedges inflation (outpacing CPI by 2x YTD) and diversifies (correlation to S&P 500 near zero).

“Buy the dip” strategies shine: Enter near $3,200 support, targeting $3,700 resistance. Physical bars/coins suit long-term holders; ETFs like GLD offer liquidity.

In Uganda’s context—tying to gold export booms—rising prices bolster revenues ($3.4B in 2024), but volatility demands hedging. Globally, as Fed Chair Powell hints at September cuts, watch CPI data (due soon) for cues.

The Verdict: No Freefall, Just Steady Climb

Gold prices aren’t expected to fall meaningfully in 2025-2026; instead, they’re forecasted to consolidate or ascend amid enduring uncertainties.

Pullbacks to $3,200-3,300 offer buying ops, but the trajectory points to $3,700+ by year-end, potentially $4,000 next summer.

As Axi notes, long-term rises are “generally believed” due to volatility’s one-way bias upward. In a world of tariffs, tensions, and tepid growth, gold’s allure endures—not as a get-rich-quick scheme, but a timeless bulwark. Investors: Stay vigilant, diversify, and let the metal’s millennium-tested resilience guide you.