New Delhi [India], July 4 (ANI): Gold prices are expected to remain range-bound during the second half of 2026 but retain significant upside potential if economic or geopolitical risks intensify, according to the World Gold Council’s Gold Mid-Year Outlook 2026.
The report, published in July 2026, said that under current macroeconomic conditions, gold may trade within approximately 5 percent of $4,100 per ounce during the second half (H2) of 2026. However, the Council’s scenario analysis suggests gold could resume its upward trend toward $4,500 per ounce, while only a strong and sustained catalyst is likely to push prices toward $5,000 per ounce.
According to the World Gold Council, three key factors could drive the next leg higher: worsening economic or geopolitical conditions, a reversal in interest rate expectations, and increased participation from long-term investors. The report noted that financial market volatility and geopolitical risk have historically supported gold prices, with a 100-point monthly increase in the Geopolitical Risk (GPR) Index historically associated with a 2.5 percent rise in gold prices. A shift toward more dovish Federal Reserve expectations would also likely benefit the precious metal.
On the macroeconomic front, the global economy is projected to grow 2.9 percent year over year in 2026, with U.S. growth forecast at 2.1 percent. U.S. inflation is expected to peak near 3.9 percent in the second quarter before easing, while global inflation is projected to average 4.3 percent for the year. Persistently elevated inflation tends to support gold, as the metal has historically outperformed when inflation remains sticky. The outlook for the U.S. dollar remains a key variable, with expectations for the second half of the year varying widely.
Central banks have purchased an average of 1,000 metric tons of gold annually since 2022. The Council estimates that an additional 20 to 30 metric tons in reserves above the long-term average of approximately 600 metric tons per year could translate into roughly a 1 percent increase in gold prices. Long-term asset owners, including sovereign wealth funds, pension funds, and insurance companies, are also increasing their exposure to gold. A pilot program in China last year enabled leading insurers to invest in the precious metal.
The report highlighted two key demand segments to watch: central banks and India. India is the world’s second-largest gold market, with annual net demand of about 800 metric tons. Since early April, the government has raised the import duty from 6 percent to 15 percent and issued consumer guidance aimed at moderating imports amid pressure on the Indian rupee. The Council estimates the duty increase alone could reduce jewelry, bar, and coin demand by 50 to 60 metric tons, or roughly 10 percent year over year.
Downside risks include a stronger U.S. dollar, interest rates rising beyond expectations, and a broader risk-on investment environment. If gold declines 10 to 15 percent from current levels, the Council said further downside would likely be limited because lower prices have historically attracted increased buying.
The World Gold Council said gold’s performance during the first half of 2026 underscored its sensitivity to macroeconomic conditions and geopolitical developments. At the same time, continued support from central banks and long-term investors may help limit downside risk and reinforce gold’s role as a strategic asset. (ANI)
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