Gold Forecast (XAUUSD) 2026

29 Aralık 2025

Gold Forecast (XAUUSD) 2026: What Are the Hidden Factors Protecting the Yellow Metal?

Written by: Rania Gule, Senior Market Analyst at XS.com – MENA

The gold market is currently going through a delicate phase that clearly reflects the nature of this asset as a mirror of macroeconomic balances, rather than merely a commodity subject to short-term speculation. The recent pullback in gold prices from record highs, which began during the early hours of today’s trading session, should be viewed as a natural step following an exceptional rally that pushed the yellow metal to unprecedented historical levels. From my perspective, what we are witnessing does not represent a shift in trend, but rather a healthy repositioning by investors after substantial gains, especially as year-end holidays approach and market liquidity declines.

Profit-taking activity led by speculators after reaching record highs reflects typical market behavior when prices become overstretched in the short term. The sharp rise seen in recent sessions created an ideal environment for reducing exposure, particularly among short-term investors who prefer locking in profits rather than facing the risks associated with year-end volatility. In my assessment, this modest pullback carries no fundamentally negative implications; instead, it suggests that the market still retains underlying bullish momentum that merely requires fresh catalysts to resume its advance.

The US dollar has also played an additional role in pressuring gold prices, as its relative strength makes the metal more expensive for investors outside the United States. However, I believe the current strength of the dollar lacks sufficient momentum to trigger a sharp reversal in gold’s trajectory, especially within a monetary environment that is gradually shifting toward easing. Historically, a stronger dollar has not always been an obstacle for gold when economic or political concerns intensify, a scenario that largely applies to the current phas

Gold’s performance in 2025 remains the most critical factor when assessing the future trend. Achieving gains of nearly 70% in a single year—its best annual performance since 1979—cannot be reduced to transient speculative moves. This rally reflects deeper structural shifts in investor behavior, as gold has strongly reasserted itself as a primary hedging tool against inflation, slowing growth, and eroding confidence in conventional monetary policies. From my standpoint, these factors have not disappeared; rather, they remain present to varying degrees.

Growing expectations of interest rate cuts by the Federal Reserve in 2026 represent one of the key pillars supporting gold. Lower interest rates reduce the opportunity cost of holding a non-yielding asset such as gold, enhancing its attractiveness relative to fixed-income assets. Although expectations suggest a limited probability of a rate cut at the upcoming meeting, the broader direction of monetary policy appears clear to me—a gradual shift toward a less restrictive stance, even if the pace is slower than markets currently anticipate.

Recent political statements, particularly those related to expectations surrounding monetary policy and the independence of the Federal Reserve, have raised legitimate concerns among investors. Any questioning of central bank independence—even at the rhetorical level—tends to strengthen demand for gold as a safe haven against unpredictable policy decisions. From this perspective, gold derives its strength not only from economic indicators but also from the growing political uncertainty on the horizon.

On the geopolitical front, developments related to the Ukraine conflict, despite cautious positive signals, remain far from a swift or comprehensive resolution. The persistence of these tensions, alongside other global flashpoints, provides additional support for gold over the medium and long term. Experience has shown that temporary de-escalation does not eliminate underlying risks, prompting investors to retain a portion of their portfolios in safe-haven assets.

Meanwhile, US economic data—such as the decline in jobless claims to better-than-expected levels—may offer temporary support to the dollar, but in my view, it is insufficient to alter the broader picture. A strong labor market does not negate other challenges related to growth, debt, and financial stability, all of which continue to underpin demand for gold, even if at a more moderate pace.

Based on all of the above, I expect gold to move in a sideways-to-bullish range in the coming period, with the possibility of limited corrections as prices approach new highs. Over the medium term, I anticipate that any pullbacks will be met with renewed buying interest, particularly from strategic investors and central banks. Over the long term, I continue to see gold as well-positioned to maintain its status as one of the most important defensive assets in a world marked by increasing economic and political volatility, even if the path toward higher levels remains uneven and marked by periodic profit-taking.

 

Zaid Barem / ymm