Quick overview

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The bullion metal is trading at around $3,768 per troy ounce, representing a robust gain of more than 41% so far this year, up from early 2025 levels of about $2,639.

This increase has been driven by central bank purchases, ongoing geopolitical tensions, and a weakening U.S. dollar in light of anticipated rate cuts by the Fed and rising inflation concerns caused by the U.S. policy shifts implemented by the Trump administration, such as tariffs. XAU/USD reached several all-time highs in 2025, including a late-September peak.

The performance of gold in the upcoming months and into 2026 will depend on several variables: Central Bank Demand—anticipated to exceed 500 tonnes per quarter, with 95 percent of central bankers surveyed planning to boost reserves in 2025 as part of their diversification away from the dollar.

Monetary policy—by lowering the opportunity cost of holding non-yielding gold, the Fed’s planned 100-basis-point rate cut by the end of the year may help support prices.

Economic and geopolitical risks include escalating conflicts in the Middle East, Ukraine, and the U.S., with inflation at 2 percent year-over-year providing additional tailwinds. At the same time, tensions with China increase gold’s appeal as a haven.

ETF inflows are expected to push holdings above 3,900 tonnes by the end of the year, nearing 2020 levels, according to investor sentiment. With gold experiencing 73 green days in the last 30 days and the RSI indicating sustained upside, technical indicators suggest a bullish trend. However, if yields rise, there could be short-term pullbacks to $3,650–$3,600.

The long-term bullish case for gold remains strong, with projections indicating a 10–50% increase from current levels by the end of 2025. Strong demand fundamentals and low downside risks support this outlook. To mitigate short-term volatility, consider dollar-cost averaging. Keep an eye on GDP data and Fed announcements for potential pullbacks.

If your risk tolerance allows, allocate 5–10% of a diversified portfolio to gold, which serves as a powerful hedge against uncertainty.