New Delhi [India], January 6 (ANI): After one of its strongest rallies in decades, gold prices may see a temporary pause in 2026, though analysts say the long-term bullish trend remains firmly intact, according to ICICI Direct’s Yearly Commodity Outlook.
ICICI Direct analysts noted that potential US Federal Reserve rate cuts, ongoing concerns over rising global debt, and questions about the Fed’s long-term independence are likely to keep gold attractive as a hedge against macroeconomic uncertainty. “Concerns over Fed independence will be supportive. There are fears in the market that the next Fed chair candidate would push for lower interest rates,” the report said.
The report projects that gold prices are unlikely to fall below the $3,500–3,600 range even during corrective phases, while upside potential remains significant, with prices potentially testing $4,800–5,000 if macroeconomic risks intensify or the dollar weakens further.
Gold surged more than 60% in 2025, reaching record highs driven by US rate cuts, aggressive central bank buying, geopolitical tensions, and concerns over US fiscal stability. The sharp rise, however, has made prices vulnerable to near-term profit-taking, reducing the immediate risk-reward appeal for new investors. Gold hit an all-time high of USD 4,550 in 2025 following a 75-basis-point rate cut by the US Federal Reserve.
Analysts expect some moderation in prices in 2026, particularly if geopolitical risks ease or global trade tensions cool. Progress toward peace between Russia and Ukraine or stabilisation in US trade policy could lower the risk premium embedded in gold prices. However, a sharp correction appears unlikely.
Structural support for gold remains strong, driven by sustained central bank purchases as countries diversify reserves away from the US dollar. Global central banks have been adding roughly 1,000 tonnes of gold annually since 2022, making gold the world’s second-largest reserve asset after the dollar. Persistent inflation concerns, high government debt, rising investments in gold ETFs, and expectations of further dollar weakness are also likely to support gold prices in 2026.
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