Gold prices are expected to rise to a record annual average of US$4,920 per ounce in 2026 as increased investor demand and geopolitical uncertainty continue to boost the metal’s safe-haven appeal, according to Metals Focus.
Total gold supply is expected to rise 3.1% this year, driven by modest gains in mine production and recycling, the London-based precious metals consultancy said in its newly released Gold Focus 2026 report. Total demand is expected to decline by 2.3%, reflecting weaker jewelry consumption and lower central bank purchases, although these declines are set to be largely offset by stronger buying of bullion and coins. Physical investment is expected to surpass jewelry as the largest component of gold demand for the first time.
Matthew Piggott, director of gold and silver at Metals Focus, said: “Gold rose strongly in 2025 by 44%, which is its best performance since 1980.” “The drivers from 2025 remain intact: persistent US policy uncertainty, persistent concerns about the dollar’s long-term outlook, elevated geopolitical risks and extended equity valuations. Together, these factors reinforce gold’s role as a safe haven and diversified portfolio.”
The forecast highlights the ongoing shift in global gold markets as investors increasingly prefer bullion to jewellery. Metals Focus expects mine production to rise by 2.4% to 3,907 tons this year after reaching a record level of 3,817 tons in 2025.
Supply growth
The recycling rate is expected to rise by 5.1% despite limited inventories in the nearby market and investors being reluctant to part with their holdings amid economic uncertainty.
Physical investment rose 16% in 2025 to reach a 12-year high, supported by tariff concerns, rising US debt levels, questions about the independence of the Federal Reserve and ongoing geopolitical tensions. Exchange-traded products recorded inflows of 803 tons, their strongest annual increase since 2020.
Demand for jewelry moved in the opposite direction. Global manufacturing fell 19% last year to a five-year low of 1,646 tonnes, as record prices encouraged consumers to buy lighter cuts and switch to lower-carat products and platinum or gold-plated alternatives. Metals Focus expects jewelry demand to decline another 11% in 2026.
Central banks remained big buyers despite the slowdown. Net formal sector purchases fell by 22% in 2025 to 848 tonnes, the lowest level in four years, although Metals Focus noted that purchasing remained well above levels seen before 2022 as countries continue to diversify reserves away from traditional holdings.
Taurus case
The consulting firm acknowledged the recent pressure on gold prices due to changing interest rate expectations and the conflict involving Iran. However, she expects those headwinds to be temporary.
“Despite these headwinds, we are confident that once the dust of the Iran war settles, gold will resume its rally,” the report said. “Critically, all of the other factors that boosted gold last year are likely to remain intact through the rest of 2026 and beyond.”
Forecasts indicate that investors are increasingly looking to gold as a protection against inflation, geopolitical instability and concerns about long-term economic growth. As demand patterns evolve and physical investment exceeds jewelry consumption, the market appears to be entering a new phase in which investment flows play a greater role in determining prices.
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