| Summary points
Gold prices are expected to remain range-bound around $4,100 per ounce in the second half of 2026 amid moderating inflation and limited monetary easing. The World Gold Council sees potential upside to $4,500-$5,000 per ounce if geopolitical risks intensify, but prices could fall to $3,500 if economic growth remains resilient. Central banks are expected to remain net buyers of gold in 2026, providing support to prices despite uncertainty over the pace of purchases. |
Gold prices are expected to remain largely range-bound around $4,100 per ounce during the second half of 2026 as moderating inflation, expectations of limited further monetary tightening and softer demand from key markets, including India, temper the precious metal’s rally, according to the World Gold Council (WGC).
The council said gold could continue to trade near current levels despite heightened geopolitical and economic uncertainties, with prices likely to remain supported by central bank purchases and safe-haven demand. However, weaker consumer demand, particularly in India, and resilient global economic growth could cap gains.
After a volatile first half of the year, during which gold prices surged above $5,500 per ounce in January before falling below $4,000 in late June, the metal remains around 7 per cent lower on a year-to-date basis. Despite the correction, gold continues to rank among the best-performing asset classes over the past year.
The WGC said gold could resume its upward trajectory towards $4,500 per ounce and potentially test the $5,000 level if supported by renewed geopolitical tensions, weaker economic growth, expectations of lower interest rates or a resurgence in investor buying during price declines. At the time of the report, COMEX gold prices were trading about 1.6 per cent higher at $4,104 per ounce.
However, the council also cautioned that gold prices could fall towards $3,500 per ounce if global economic growth remains robust and bond yields continue to rise, increasing the opportunity cost of holding non-yielding assets such as gold. It added that bargain buying could limit any sharp decline in prices.
Central bank buying
The WGC expects central banks to remain net buyers of gold in 2026 despite tactical selling and gold swaps by some institutions during the first quarter. According to the council’s survey of reserve managers, an increasing proportion of central banks expect to raise their gold holdings over the next 12 months, although uncertainty remains over the pace of purchases.
India, the world’s second-largest gold market with annual demand of around 800 tonnes, is expected to witness weaker demand following the increase in gold import duty to 15 per cent from 6 per cent in May.
According to the council’s estimates, the import duty hike alone could reduce India’s jewellery, bar and coin demand by 50-60 tonnes, or around 10 per cent year-on-year. The WGC also warned that slowing economic growth, a weaker rupee and elevated energy prices could erode consumers’ purchasing power and discourage buying even during price corrections.
Additionally, the council said rising defaults on collateralised gold loans, which have gained popularity in recent years, could increase the supply of gold in the domestic market, adding further pressure on demand dynamics.
