Gold to average record $4,920 in 2026 as investment overtakes jewellery

Gold prices are expected to surge to a record annual average of $4,920 an ounce in 2026, up 43% from last year, as physical investment overtakes jewellery as the largest component of demand for the first time, according to Metals Focus.

"Gold rallied strongly in 2025, by 44%, its best performance since 1980," Matthew Piggott, director of gold and silver at Metals Focus, said. "The drivers from 2025 remain intact: ongoing US policy uncertainty, persistent concerns about the dollar's long-term outlook, elevated geopolitical risks and stretched equity valuations."

Total gold supply is forecast to rise 3.1% to 5,383 tonnes in 2026, driven by a 2.4% increase in mine production to 3,907 tonnes — up from a record 3,817 tonnes in 2025 — and a 5.1% gain in recycling to 1,476 tonnes, the consultancy said in its Gold Focus 2026 report. Total demand is projected to slip 2.3% to 4,177 tonnes, with double-digit declines in jewellery fabrication and central bank purchases partly offset by a 15% jump in bar and coin buying to 1,615 tonnes, the highest since 2013.

The metal hit an all-time high of $5,595 an ounce in January before retreating 20% as the Iran conflict weighed on sentiment and shifting interest-rate expectations triggered profit-taking. Metals Focus expects those headwinds to prove temporary, with the bull run resuming once geopolitical tensions ease.

Supply Growth Outpaces Demand

Mine production reached a record 3,817 tonnes in 2025, and Metals Focus expects further expansion this year as operators respond to elevated prices. Recycling volumes are also rising despite limited near-market stocks and holders' reluctance to sell during periods of uncertainty, the report showed.

On the demand side, jewellery fabrication fell 19% in 2025 to 1,646 tonnes, a five-year low, as record prices pushed consumers toward lighter pieces, lower-carat products and substitutes such as platinum. Metals Focus forecasts another 11% decline in 2026 to 1,459 tonnes.

Central bank purchases, a key driver of gold's rally in recent years, are also slowing. Net official sector buying dropped 22% in 2025 to 848 tonnes, a four-year low, and is expected to fall a further 15% to 720 tonnes in 2026. Higher energy prices have led some central banks to sell gold to fund currency intervention, while an anticipated rise in Russian gold sales will add to gross sales, Metals Focus said.

Investment Demand Reshapes Market

Physical investment rose 16% in 2025 to a 12-year high of 1,404 tonnes, supported by tariff concerns, rising US debt levels and questions about Federal Reserve independence. Exchange-traded products recorded inflows of 803 tonnes, their strongest annual gain since 2020. China is expected to lead the growth in bar and coin buying this year, the consultancy said.

The shift toward investment demand marks a structural change in the gold market. With jewellery demand in structural decline and central bank buying moderating, bullion's price trajectory is increasingly tied to investor flows rather than consumer or official-sector purchases.

Gold at $4,920 would represent a 43% gain from the 2025 average of $3,432 and more than double the 2024 average of $2,386. The metal's 2025 performance was its strongest in 44 years, and Metals Focus expects the factors that drove that rally — policy uncertainty, dollar concerns and geopolitical risk — to persist through 2026 and beyond.

This article is for informational purposes only and does not constitute investment advice.