Gold Outlook 2026: Will there be a rally in gold rates in 2026?

SYNOPSIS: Gold can enter 2026 with strong momentum after exceptional multi-year gains, supported by central-bank buying, geopolitical risks and ETF inflows. Axis Securities sees upside potential but warns that macro uncertainty, rising yields and stronger risk assets could temper the rally.

Gold has delivered a strong performance over the past five years, recovering from a 5 percent decline in 2021 to post consistent gains thereafter. Returns stood at 14 percent in both 2022 and 2023, followed by a stronger 21 percent rise in 2024. Meanwhile, the year 2025 has been extraordinary for gold, with the metal delivering gains of over 60 percent – its strongest annual performance since 1979. 

Domestic markets mirrored this surge, supported by robust central-bank purchases, heightened geopolitical tensions, persistent economic uncertainty, and heavy ETF inflows.

Axis Securities, in its latest 2026 gold outlook, highlights that the metal’s remarkable rally has been propelled by aggressive central-bank accumulation, escalating global risks, and favourable policy cues from the US administration. With prices now trading near all-time highs, the brokerage assesses whether this upward momentum can sustain into 2026.

Potential Drivers of Gold Prices in 2026

Axis Securities identifies multiple factors that could sustain gold’s upward trajectory into 2026. A key catalyst could be a potential hyperinflation scenario triggered by excessive money creation by major central banks – particularly the US Federal Reserve, to manage debt obligations. Such currency debasement may encourage investors to shift more aggressively toward bullion as a store of value.

The ongoing de-dollarisation trend, driven by central banks, has already supported elevated gold prices. If this trend accelerates further next year, it could reinforce gold’s march to new all-time highs.

ETF inflows remain a major structural tailwind, with rising demand pushing prices to record levels. If inflows continue at the current pace, gold is likely to maintain its strong upward momentum in 2026.

Central-bank buying also remains a powerful support pillar. Institutions added over 1,180 tonnes of gold last year, and although the pace has moderated due to elevated prices, purchases are still expected to reach around 1,000 tonnes this year. Continuation of this trend into 2026 may trigger another leg of the rally.

Geopolitical and macro uncertainty, amplified by President Trump’s tariff stance and expectations of global rate cuts, further strengthens the case for gold as a safe-haven asset heading into next year.

Risks That Could Disrupt the Gold Rally

A shift back to hawkish monetary policy remains a key downside risk. If inflation stays elevated, major central banks – particularly the US Federal Reserve – may pause rate cuts or even hint at renewed tightening. Higher real yields increase the opportunity cost of holding gold and could trigger long liquidation.

A strong and sustained recovery in the US dollar may also weigh on bullion. A firmer dollar, supported by stronger economic data, capital flows into US assets, or safe-haven preference for the greenback over gold, could limit the metal’s upside.

Softening central-bank demand presents another structural risk. Central banks have been significant buyers in recent years, but any slowdown – driven by reserve diversification nearing its limits, improving currency stability, or political realignments – could weaken a major pillar of support.

Easing geopolitical tensions may further reduce safe-haven demand. Stabilisation in key global flashpoints, such as the Middle East, the Russia-Ukraine conflict, or US-China trade frictions, typically tempers inflows into gold, which thrives during periods of heightened uncertainty.

Strong performance in equities and risk assets could divert capital away from gold. A robust rally in global equities, technology stocks, cryptocurrencies, or other higher-yielding assets often encourages a risk-on environment, reducing demand for defensive assets like gold.

A rebound in global bond yields and weaker physical demand in India and China could also pressure prices. Higher nominal or real yields, driven by improved growth prospects or increased government borrowing, enhance the appeal of income-generating instruments. Meanwhile, softer physical offtake in India and China, due to high prices, slower income growth, import restrictions, or currency weakness, may dampen near-term demand.

Outlook: Axis Securities expects gold to enter 2026 with strong momentum, but navigating a more complex macro backdrop. Continued policy accommodation, persistent uncertainty, and steady central-bank buying may push prices to new highs, although rising yields, geopolitical stabilisation, or stronger risk-asset performance could temper the rally after an exceptional year.

Written by Shivani Singh

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