Global uncertainty remains strongest catalyst for gold
Global uncertainty has once again emerged as one of gold’s most powerful allies heading into 2026, with the precious metal opening this week at US$4,507 an ounce at the time of writing.
According to The Perth Mint, this momentum is far from finished. Speaking to Mining.com.au, The Perth Mint General Manager of Institutions and Business Solutions John O’Donoghue says guidance from major global bullion banks points to the precious metal remaining elevated and potentially pushing to fresh record highs.
“As we enter 2026, one of the most immediate factors influencing sentiment is the expectation of US Federal Reserve interest rate cuts,” O’Donoghue says.
“Lower interest rates tend to reduce real yields, which has historically been supportive of gold prices. Broader macroeconomic conditions and investor demand will also continue to play an important role.”
The outlook builds on what was already considered a blockbuster year, with gold breaking more than 50 price records – ending 2025 at around US$4,330 an ounce as previously reported.
“Once again, gold lived up to its long-held reputation as a safe-haven asset,” O’Donoghue tells this news service.
“Gold had an exceptional year, with prices rising by more than 50% in Australian dollar terms and featuring prominently in headlines for much of the year.”
O’Donoghue explains that numerous factors contributed at different points throughout 2025, as early in the year there were global concerns around potential impacts of tariffs on precious metals and central banks continued to make strategic purchases as part of ongoing reserve rebalancing.
“Later in the year, particularly between August and October 2025, we saw an unprecedented surge in retail demand,” he says.
“During this period, the gold price rose by close to US$1,000, leading to customers patiently queueing for hours to purchase physical gold. Ongoing geopolitical uncertainty, which intensified at various points throughout the year, further reinforced gold’s appeal.”
In recent weeks, heightened safe-haven demand has been fueled by the capture of Venezuelan President Nicolás Maduro and US President Trump’s comments about overseeing the Venezuela’s Government if the interim leadership does not cooperate.
O’Donoghue explains that the US economy has surprised many commentators with its resilience, partly driven by significant investment in artificial intelligence.
“If this strength delays anticipated Federal Reserve rate cuts, it could weigh on gold prices,” he tells this news service.
“A stronger US dollar or a meaningful easing of global uncertainty could also reduce demand for gold as a defensive asset.”
However, this does not seem to be happening as Sprott Asset Management CEO John Ciampaglia tells Bloor Street Capital Principal James Connor that the US dollar has declined “significantly” this year.
“You have an administration that consistently promotes a strong dollar and positions itself as a champion of a strong dollar. We think it’s inevitable that currencies weaken when the world is fractured in terms of trade policy and relations,” Ciampaglia says.
“One of the easiest ways to respond to a trade war is to de-value your currency, making your exports more competitive. Even though they’re talking a big game about the dollar, I think they’ve let the dollar slide as trade relations have soured.”
A bullish year ahead
Looking ahead, major financial institutions are increasingly bullish on gold’s medium-term trajectory.
As reported last week, JP Morgan head of global commodities strategy Natasha Kaneva says the structural trend of official reserve diversification into gold still has further to run.
“We expect gold demand to push prices toward US$5,000 per ounce by year-end 2026,” Kaneva says.
JP Morgan Global research forecasts prices to average around US$5,055 an ounce towards the end of 2026 and rise to at least US$5,400 an ounce by the end of 2027.
State Street Investment Management is similarly optimistic, anticipating gold to fetch up to US$5,000 an ounce this year.
The firm notes that the US$5,000 price of gold is viable in 2026, especially if physical demand stays unencumbered by record global prices and the reallocation thematic favours increased gold exposure.
Markets, however, remain finely attuned to developments in the US economy. According to Trading Economics, investors have recently been looking at geopolitical risks, as well as upcoming US economic data, including the December jobs report, for further clues on the Federal Reserve’s monetary policy outlook.
“Ongoing geopolitical uncertainty, continued central bank demand, and renewed investor interest in gold-backed exchange traded funds all provide potential upside for the gold market,” O’Donogue tells this news service.
Over the past month, gold’s price has increased 6.81% and is up 68.05% compared to the same time last year, as reported by Trading Economics.
With rate cuts looming, geopolitical tensions simmering and central banks continuing to diversify, gold appears to be well-positioned to extend its headlining run – proving once again that in uncertain times, the world turns to bullion.
Source: https://mining.com.au