Gold enters 2026 at record highs after an exceptional rally driven by strong central bank demand, macro uncertainty, and a shift in strategic asset allocation. We remain positive on our outlook, with macro tailwinds and fundamentals pointing to further upside in 2026
Gold staged a record-breaking rally in 2025, doubling in value in under two years. We believe that gold’s main drivers, including central bank buying, , a weaker dollar, concerns about the Fed’s independence, and ETF buying, are all still in place, while the global macro environment remains broadly supportive for gold.
President Trump also recently said he has decided on his pick for the next Fed chair, a candidate that the market expects will push for lower interest rates. All of these factors will benefit gold. We see gold prices hitting more record highs in 2026.
Gold Keeps Breaking Records
Source: Refinitiv, ING Research
Gold has long reflected global economic and political stress, with its price typically rising during periods of heightened uncertainty. In the wake of the global financial crisis, gold surged past $1,000. During the Covid-19 pandemic, it climbed to $2,000. Then, when Trump announced tariffs in April, it surpassed the $3,000 mark. The $4,000 mark was hit during the recent prolonged US government shutdown.
Gold Is Outperforming
Source: Macrobond, ING Research
Demand Reached All-Time Highs in the Third Quarter
Global gold demand hit 1,313 tonnes in the third quarter of 2025, the strongest quarterly total on record, according to the World Gold Council. This surge was driven by strong investment demand, including purchases via exchange-traded funds, bars and coins, as well as significant buying by central banks.
Investment Demand Drove Demand Growth in Q3
Source: World Gold Council, ING Research
ETF investors added 222 tonnes of gold holdings, marking the biggest quarterly inflow in years. Bar and coin demand remained robust at 316 tonnes. Meanwhile, central banks bought 220 tonnes, up nearly 30% from the second quarter, led by emerging markets.
But jewellery demand fell 19% year-on-year to 371 tonnes, which was the sixth straight year-on-year decline, as record prices curbed consumption. However, in value terms, spending on jewellery rose 13% to $41bn, with higher prices offsetting weaker volumes.
Central Banks Are Still Bullion Hungry
Central banks remain a key pillar of demand for gold. In Q3, central banks increased their buying pace following two consecutive quarters of slowing purchases. They bought an estimated 220 tonnes of gold in the quarter, 28% higher than the Q2 total and 6% above the five-year quarterly average. The National Bank of Kazakhstan was the largest buyer in the third quarter, while the Central Bank of Brazil added gold for the first time since 2021.
In October, central banks added a net 53 tonnes to reserves – a 36% increase from September and the strongest monthly gain since November 2024. Year-to-date net purchases now stand at 254 tonnes, marking a slower pace than the previous three years as higher prices temper demand.
Poland remains the standout buyer, leading both October and year-to-date with 83 tonnes. After a five-month pause, the National Bank of Poland resumed purchases, adding 16 tonnes last month and lifting its holdings to 531 tonnes, or 26% of total reserves.
China’s central bank, another top buyer, has reported gold purchases for 13 months in a row, adding 30,000 ounces (0.93 tonnes) in November, lifting the total holdings to about 74.1 million ounces (2,305 tonnes), despite record high prices. China is also attempting to widen its presence in the bullion market by extending gold storage facilities to foreign banks – an offer Cambodia has already accepted, signalling Beijing sees gold as more than a reserve asset, it’s also a tool of financial influence.
China’s Official Gold Reserves Have Risen 12 Months in a Row
Source: PBoC, ING Research
And central banks are still hungry for more gold. South Korea’s central bank is said to be considering adding gold to its reserves for the first time since 2013. Madagascar also signalled interest in increasing its gold reserves. Serbia’s president also recently said that the country’s gold reserves will almost double to 100 tonnes by 2030.
Central Banks Continue to Add Gold Despite Higher Prices
Source: World Gold Council, ING Research
The pace of buying by central banks doubled following Russia’s invasion of Ukraine in 2022. Central banks’ appetite for gold is driven by concerns from countries about Russian-style sanctions on their foreign assets in the wake of decisions made by the US and Europe to freeze Russian assets, as well as shifting strategies on currency reserves. The pace of annual purchases by central banks has doubled since the outbreak of the Russia-Ukraine war, from about 500 metric tonnes a year to more than 1,000.
Last year, central banks bought a combined 1,045 tonnes, accounting for about a fifth of overall demand. Poland, India and Turkey were the largest buyers in 2024, according to the World Gold Council.
A key downside risk for gold looking ahead would be if central banks decided to sell their reserves. In the Philippines, Benjamin Diokno, a board member of the central bank, recently said the bank should sell some of its “excessive” gold holdings. In the US, Senator Cynthia Lummis has proposed that the country sell a portion of its gold reserves to buy Bitcoin.
The US Leads in Gold Holdings
Source: World Gold Council, ING Research
However, we believe the shift in central banks’ purchases has been more structural, and they will continue to add gold to their reserves, as strategies on currency reserves shift. World Gold Council’s 2025 central bank survey showed the strongest intention to continue buying gold since it was initiated in 2019.
ETF Holdings Are Near all-Time Highs
ETFs have been another powerful force behind gold’s record-breaking rally this year, with investment demand gathering steam in the third quarter. Last quarter marked a record high for gold-backed ETF inflows. Gold ETF investors added 222 tonnes, taking global holdings within reach of their November 2020 all-time high. Investor holdings in gold ETFs generally rise when gold prices rise, and vice versa.
Fed Easing to Revive ETF Demand
Source: Refinitiv, ING Research
After a period of consolidation, gold ETFs and institutional investors are showing renewed appetite. We expect ETF buying to pick up as the US Fed is likely to continue cutting interest rates, with ETF buying usually closely linked to Fed policy.
There is still room for further additions, given the current total remains shy of the peak hit in 2020. More inflows could push gold even higher.
ETFs Have had their Strongest YTD Inflows Since 2020
Source: World Gold Council, ING Research
Is Mine Growth a Headwind for Gold?
Gold mine supply growth tends to be slow and relatively inelastic. Since 2019, global gold production has remained very stable.
In practice, even with some supply growth, the impact on prices is likely to be limited. Gold demand is driven more by macro factors – real yields, the US dollar, central bank buying, and investment flows – changes in mine output rarely exert strong downward pressure on prices.
Gold Mine Supply Has Been Relatively Stable
Source: World Gold Council, ING Research
Strength to Continue in 2026
Looking into next year, central banks are still buying, Trump’s trade war is ongoing, geopolitical risks remain elevated, and ETF holdings continue to expand while expectations of more Fed rate cuts intensify, suggesting this bull run still has further to go. We see prices averaging $4,325/oz in 2026.
Downside risks include a major market sell-off, which could force investors to dump gold to raise cash. Other downside risks include reduced safe haven demand amid easing geopolitical tensions. Central banks selling their gold reserves pose another risk to our outlook.
However, we expect the downside to be limited as any weakness will likely attract renewed interest from both retail and institutional buyers.
Disclaimer: This publication has been prepared by ING solely for information purposes irrespective of a particular user’s means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more