World Gold Council: The second half of 2026 is a critical turning point for gold prices

SadaNews - The World Gold Council predicts that the price of gold will hover around the range of $4100 per ounce until the end of the year based on current market conditions. This is the first time the council has published a specific figure after previously only offering scenarios and estimates of increases or decreases.

The council stated in a report released today that the second half of 2026 will be pivotal, shaped by uncertainty arising from geopolitical developments, interest rates, and investor sentiment, following a volatile start to this year.

It noted that elevated geopolitical risks, largely driven by the Iran War, were among the major factors influencing gold's performance in the first half, along with adjustments in investors' positions and profit-taking. Conversely, the opportunity cost had a mixed impact as markets recalibrated expectations for interest rates and the dollar.

Gold recorded more than 12 historic record levels, reaching an unprecedented level of $5405 per ounce in late January, before sharply retreating to a level of $4002 per ounce in June. This volatility resulted in a 7% decline in price since the beginning of the year, raising the average volatility to 30%, according to the council's report.

Gold continued its decline on Wednesday for the third consecutive day, with the dollar strengthening supported by signs that the U.S. Federal Reserve might tighten monetary policy, while traders monitor discussions between the United States and Iran. Spot gold fell below $3980 per ounce, after dropping 2% during the previous two sessions, marking the lowest level since November.

$4100 as the price for gold according to the current interest rate trajectory

As the second half of the year approaches, the council believes that gold will continue to serve as an indicator of global macroeconomic conditions. At current levels, the price appears largely aligned with market expectations, which indicate that the Federal Reserve is likely to implement at least one interest rate hike in 2026, probably by October, alongside tightening monetary policy from major central banks, with U.S. inflation reaching a peak of about 3.9% in the second quarter.

The council added that if these conditions persist, gold could trade within a range that increases or decreases by about 5% from the $4100 per ounce level until the end of the year.

The council suggested that the primary pressures on gold during the second half will be the strength of the dollar, higher-than-expected interest rate hikes, and improved appetite for high-risk assets.

It added that prolonged trading below $4000 per ounce could trigger additional selling, but a decline exceeding 10% from current levels is likely to attract natural demand from long-term buyers across multiple geographical areas, based on historical performance.

When will gold rise again?

The council linked the resumption of the upward trend in gold prices to further deterioration in geopolitical or economic conditions or if expectations for interest rates change, but surpassing the $4500 per ounce level will still depend on strong indicators of a slowdown in the global economy.

The report noted that the majority of price movements for gold occur during Asian and American trading sessions, reflecting the growing pivotal role of Asian investors in determining global prices.

It believes that continued purchases by central banks represent one of the most important factors supporting gold in the long term, having been among the major drivers of its rise over the past three years when its prices more than doubled.

A survey conducted by the World Gold Council in collaboration with YouGov, which included 74 central banks, revealed that 45% of them intend to increase their gold reserves over the next year, the highest percentage since the survey began in 2018, while only one central bank indicated plans to reduce its holdings. Another survey by the council involving 66 central banks showed that most participants plan to continue purchasing gold over the next five years, enhancing the precious metal's status as a strategic asset in official reserves.

Temporary pressures on gold

In an interview with "Asharq Bloomberg," Joseph Cavatoni, the strategic market analyst at the World Gold Council, said that expectations for interest rates and real yields represent the biggest challenge for gold at the moment, prompting some investors to prefer bonds or cash liquidity.

However, he emphasized that the current pressures remain temporary, and long-term demand remains strong, supported by continued purchases by central banks and strategic investors, as mentioned in the following video:

Today's statement quoted Juan Carlos Artigas, regional CEO for the Americas and global head of research at the council, saying, "Interest rates remain an important factor, and we expect them to be one of the most significant variables during the second half of the year. However, gold's performance does not rely on just one factor. Gold has faced pressures near the $4000 per ounce level this year and has previously recovered, supported by natural demand from long-term buyers in multiple geographical areas. This structural demand from central banks, institutional investors, and consumers worldwide is what supports gold's resilience."