As of November 29, 2025, spot gold prices are trading around $4,220 per ounce, reflecting a remarkable year-to-date gain of over 55% from January's starting level of approximately $2,639/oz. This surge marks one of the strongest annual performances for the precious metal in decades, driven by a confluence of macroeconomic, geopolitical, and institutional factors. Gold has repeatedly shattered record highs, peaking above $4,380/oz in October before a modest 8-11% correction amid profit-taking and temporary easing in some risks. Looking ahead, the consensus among major financial institutions remains firmly bullish for both 2025 (remainder of the year) and 2026, with forecasts pointing to sustained upward momentum, though with potential for volatility.
Key Drivers of Gold's Performance
Gold's rally in 2025 has been underpinned by structural and cyclical trends that are expected to persist into 2026:
- Central Bank Demand : Emerging market central banks (e.g., China, India, Turkey) have purchased over 1,000 tonnes annually since 2022—nearly double the pre-2022 average—totaling around 760-900 tonnes in 2025. This diversification away from the U.S. dollar continues, with forecasts for 80 tonnes/month in Q4 2025 and 2026.
- ETF and Investor Inflows : Global gold ETF holdings have risen by 619 tonnes ($64 billion) year-to-date, with North American ETFs seeing 109% y/y volume growth. Retail and institutional demand remains robust, fueled by de-dollarization concerns and gold's role as a portfolio diversifier.
- Monetary Policy and Inflation : The Federal Reserve's rate cuts (starting September 2025) have lowered the opportunity cost of holding non-yielding gold, while persistent inflation and U.S. fiscal deficits (e.g., rising government debt) bolster its safe-haven appeal. A weaker dollar amplifies this.
- Geopolitical and Policy Risks : Escalating U.S.-China trade tensions, tariffs under the Trump administration, ongoing conflicts (e.g., Israel-Hamas), and uncertainties around Fed independence have driven safe-haven buying. These factors are seen as "seismic and possibly permanent shifts" persisting into 2026.
- Supply Constraints : High prices are curbing jewelry and consumer demand (especially in India and China), while mining supply growth is limited by regulatory hurdles, supporting price floors.
Downside risks include a deeper stock market correction, faster-than-expected rate cuts ceasing, or geopolitical de-escalation, which could trigger 10-15% pullbacks. However, these are viewed as temporary, with technical supports at $3,800-$3,900/oz.
Outlook for 2025 (Q4) and 2026
- Q4 2025 : Expect sideways trading with a 0-5% upward bias, potentially testing $4,400/oz if risks intensify. World Gold Council analysis suggests 10-15% gains in stagflation scenarios, but consumer selling at highs could cap upside.
- 2026 : The rally is projected to accelerate modestly, with prices averaging $4,200-$4,500/oz and peaking near $5,000/oz by year-end. Structural demand from CBs (500-600t+ annually) and investors should outweigh any moderation in jewelry demand. Technicals show a "cup and handle" bullish reversal on long-term charts, supporting multi-year upside toward $5,400/oz by late 2026.