Will gold jump to $5000 in 2026? A comprehensive analysis of forecasts and driving factors in Egypt

Gold experienced a massive rally during 2025, approaching the $4300 per ounce mark in mid-October before retreating slightly toward $4000 in November. This volatility raised widespread questions about whether the precious metal will break into new levels next year or enter a correction phase.

Demand Drivers for Gold in 2025: Strong Starts for 2026

Total global demand for gold in the first half of 2025 reached 1249 tons, up 3% annually, while monetary value surged to $132 billion, an impressive 45% increase. This demand was not accidental but driven by a set of interconnected factors.

Gold ETFs recorded an unprecedented surge, with assets under management rising to $472 billion and holdings reaching 3838 tons, up 6% from the previous quarter, nearing the historical peak of 3929 tons. This record reflects a new strategic trend among institutional investors toward adopting gold as a core long-term asset.

On the retail side, about 28% of new investors in developed markets added gold to their portfolios for the first time, driven by intense media coverage and fears of economic instability.

Central Banks: The Key Price Support Factor

Central banks worldwide added 244 tons to their gold reserves in Q1 2025 alone, exceeding the five-year quarterly average by 24%. Notably, 44% of global central banks now hold gold reserves, up from 37% in 2024.

Leading the way, China increased its reserves by over 65 tons consecutively, Turkey surpassed 600 tons, and India also increased holdings. This behavior is no coincidence but a conscious strategy to hedge currency risks and diversify away from the US dollar, a trend expected to continue throughout 2026.

Limited Supply: The Weakest Link

While demand exploded, supply remained constrained and costly. Mine production in Q1 reached 856 tons, a slight increase of less than 1% annually. Even worse, recycled gold decreased by 1%, as holders preferred to keep their holdings in anticipation of higher prices.

Global extraction costs rose to $1470 per ounce by mid-2025, the highest in a decade, meaning any increase in production will be slow and threaten profit margins. The gap between demand and supply is widening, creating natural upward pressure on prices.

Monetary Policies: The Key to Future Movements

The US Federal Reserve cut interest rates by 25 basis points in October 2025 to a range of 3.75-4.00%, marking the second cut since December 2024. Markets expect another cut in December, increasing the likelihood of further reductions in 2026.

BlackRock estimates that the Fed may target an interest rate of 3.4% by the end of 2026. Lower interest rates reduce real bond yields, decreasing the opportunity cost of holding gold.

The European Central Bank and Bank of Japan are also moving toward more accommodative policies, weakening the euro and yen, and boosting safe-haven demand for gold.

Deep Economic Concerns: Debt and Inflation

Global public debt has surpassed 100% of GDP according to the IMF, raising serious concerns about fiscal sustainability. As these fears grow, investors are turning strongly to gold as a hedge against loss of purchasing power.

The World Bank forecasts a 35% increase in gold prices in 2025 but also expects a slowdown in 2026 as inflationary pressures ease, with prices remaining relatively high.

Weakening dollar and slowing growth in advanced economies support commodity prices, especially gold, now viewed as a safe alternative amid rising sovereign debt risks. Bloomberg data shows that 42% of major hedge funds increased their gold positions during Q3 2025.

Geopolitical Tensions: An Additional Demand Catalyst

Trade conflicts between the US and China, along with tensions in the Middle East, prompted investors to increase their safe-haven holdings in gold. Reuters reported that geopolitical uncertainty in 2025 boosted demand by 7% annually.

Tensions in the Taiwan Strait and concerns over global energy supplies pushed spot prices above $3400 in July, and with continued uncertainty, gold surged toward $4300 in October. This behavior indicates that any new geopolitical shock in 2026 could push prices to record levels.

Dollar and Bond Movements: The Key Factors

Gold historically moves inversely to the dollar and real bond yields. The dollar index declined by 7.64% from its peak at the start of 2025 until November 21, driven by expectations of rate cuts and slowing growth.

US 10-year bond yields fell from 4.6% in Q1 to 4.07% on November 21, 2025. This dual decline in the dollar and yields supported institutional demand for gold, as investors seek to rebalance their portfolios away from dollar assets.

Bank of America analysts believe that this trend could support gold price forecasts in 2026, especially with real yields stabilizing around 1.2% and continued dollar pressure.

Gold Price Outlook 2026: Who Will Hit $5000?

HSBC predicts a rally surpassing $5000 per ounce in the first half of 2026, with an expected average of $4600 for the full year, compared to $3455 as the 2025 average.

Bank of America raised its forecast to $5000 as a potential peak, with an expected average of $4400, but warned of short-term corrections due to profit-taking.

Goldman Sachs adjusted its outlook to $4900 per ounce, citing stronger inflows into gold ETFs and continued central bank purchases.

J.P. Morgan projects gold reaching around $5055 by mid-2026.

Thus, the most common range among experts is between $4800 and $5000, with an average between $4200 and $4800 over the year.

Gold Price Outlook in Egypt and the Middle East

The Middle East has seen a notable increase in central bank gold reserves. The Central Bank of Egypt added to its holdings, and the Qatar Central Bank increased purchases by 3 tons in Q1 alone.

Specifically for Egypt, the forecast for gold prices in the coming days looks strong. Market estimates suggest gold could reach approximately 522,580 EGP per ounce in 2026, representing a 158.46% increase compared to current prices. This reflects the direct benefit of the expected dollar rally, especially if gold approaches $5000.

In Saudi Arabia, if prices approach $5000 per ounce as expected, this could translate to around 18,750 to 19,000 SAR at a fixed exchange rate between 3.75 and 3.80 SAR.

In the UAE, the same conversion could give an estimate of approximately 18,375 to 19,000 AED per ounce.

It’s important to note that gold price forecasts in the Middle East are approximate and depend on several assumptions, primarily stable exchange rates (achieved in Saudi Arabia and the UAE), continued global demand, and no major economic shocks.

Downside Scenarios: Cautious Prudence

Despite optimism, HSBC issued warnings about a potential loss of upward momentum in the second half of 2026, with possible corrections toward $4200 if investors take profits widely. However, a crash below $3800 is unlikely unless a major economic shock occurs.

Goldman Sachs warned that sustained prices above $4800 could test the market’s “price credibility,” challenging gold’s ability to maintain high levels amid weak industrial demand.

However, analysts at J.P. Morgan and Deutsche Bank agree that gold has entered a new price range that is difficult to break downward, thanks to a strategic shift in investor perception of it as a long-term asset.

Technical Analysis: The Current Picture

Gold closed on November 21, 2025, at $4065.01 per ounce, after reaching a high of $4381.44 on October 20, 2025. The price broke below the upward channel on the daily chart but maintained the short- and medium-term main uptrend around $4050.

$4000 represents a strong support and a critical threshold. A clear daily close below this level could target $3800, 50% Fibonacci retracement, before resuming the rally.

Conversely, $4200 is the first strong resistance. Breaking above it opens the way toward $4400 and then $4680.

The RSI remains at 50, indicating neutrality without a clear bias. The MACD stays above zero, confirming the overall bullish trend.

The technical outlook suggests continued sideways trading between $4000 and $4220 in the near term, with the overall picture remaining positive as long as the price stays above the main trendline.

Summary: Will Gold Really Rise in 2026?

Despite the volatility of 2025, the fundamental factors favor further gains in 2026. Continued demand from central banks and investors, limited and costly supply, accommodative monetary policies, debt concerns, dollar weakness—all create a conducive environment for further upward movement.

If real yields keep declining and the dollar remains weak, gold is likely to hit new record highs approaching $5000. However, if inflation falls and market confidence returns, the metal may enter a long-term stabilization phase without reaching the targeted levels.

Investors in Egypt and the broader Middle East could benefit significantly from this rally, especially if gold prices rise toward the high forecasts.