Gold’s exceptional performance throughout 2025 has captured investors’ attention as the precious metal price surged 60% from the beginning of the year. This remarkable rally was propelled by an unprecedented combination of geopolitical turbulence, dollar weakness, and surging investment demand across both institutional and retail channels, writes eToro analyst for Romania, Bogdan Maioreanu.
But in 2026, the elements that led to this year’s surge might change, and this could either extend the historic run or trigger a correction depending on how global economic and political dynamics unfold.
The factors that drove the rise in gold in 2025, according to the World Gold Council’s Gold Outlook 2026 report, reveal a market responding to multiple simultaneous pressures. Increased geopolitical risk, a weaker US dollar, and falling interest rates were factors that led to the appreciation of gold prices.
The reduction in the opportunity costs of holding this non-yielding asset contributed further. Positive price dynamics and investor positioning, together with economic growth factors, were other important factors. This diversified support structure signals a market that is responding to fundamental forces rather than speculative excess. Central banks have supported the price through robust gold purchases above historical averages, while global gold ETFs have attracted inflows of $77 billion and accumulated over 700 tons of gold.
In 2026, the gold market will depend on how different macroeconomic scenarios unfold. According to the Gold Outlook 2026 report, the baseline consensus view is the one where global GDP growth remains stable around 2.7 to 2.8 % in real terms, the Federal Reserve implements approximately 0.75% of additional rate cuts and we will see a possible decrease in US inflation. In this scenario, gold prices would likely remain rangebound with movements between -5% to +5% from current levels. However, if economic data continues to soften and the US labor market weakens more than anticipated, prompting the Fed to cut rates beyond current expectations, gold price could rise 5% to 15% on the back of lower interest rates, a weaker dollar, paired with a heightened risk aversion.
In a more severe scenario characterized by a synchronised global slowdown and heightened geopolitical tensions, gold could surge 15% to 30% as investors seek safe-haven assets amid a pronounced flight to quality. Investment demand, particularly via gold ETFs, would remain a key driver in this scenario, offsetting weakness in other areas of the market, such as jewellery or technology.
The downside scenarios for gold are related to a possible US reflation where stronger-than-expected economic activity forces the Federal Reserve to hold or even raise interest rates. Under these conditions, rising yields and a strengthening dollar would increase the opportunity cost of holding gold, potentially triggering a correction of 5% to 20% from current levels as investors rotate from safe havens to risk assets. Gold ETF holdings could see sustained outflows as investors rotate into equities and higher-yielding assets. Historical analysis suggests that opportunistic buying from consumers and long-term investors could provide a buffer in such an environment, though the combination of higher opportunity costs and negative momentum could create challenging headwinds.
The Gold Outlook 2026 report also mentions two wildcards that could materially influence gold’s trajectory in 2026. Central Banks’ demand remains a significant contributor to gold’s performance. Gold reserves from emerging market countries, which are the main source of demand, remain well below those from developed countries. If geopolitical tensions escalate, these purchases could accelerate, reinforcing structural support for gold. Recycling flows represent another potential swing factor, having remained surprisingly muted this year despite elevated prices as consumers increasingly use gold as collateral for loans rather than selling it outright.
What 2026 will bring to gold is important for both global and Romanian retail investors. According to theeToro Retail Investor Beat survey, 30% of global and 32% of Romanian investors have in their portfolios a form of commodity that may include gold. Ultimately, throughout 2025, gold showed its safe-haven and wealth accumulation characteristics. We will see if they will play next year in favor or against the yellow metal.
