Will the gold price rally continue in 2025? Outlook and investment opportunities for 2026

Last year, gold experienced a historic surge. Amid increasing global economic uncertainty, rising geopolitical tensions, and a weakening dollar trend, gold firmly established its position as a safe haven asset. In particular, the gold price in 2025 rose more than 75% compared to the previous year, and whether this upward trend will continue into 2026 is a major concern for investors.

2025 Gold Price Overview and Reasons for the Strong Rise

To understand the sharp increase in gold prices in 2025, we need to look at specific figures. As of mid-January, domestic gold prices reached approximately 952,000 won per don (a traditional Korean weight unit), a jump of over 76% from 541,000 won in the same period last year. International gold prices also rose to about $4,585 per ounce, up 5.85% from the start of the year and nearly 38% from six months earlier.

This strong gold price trend is not just a short-term fluctuation. The Korea Gold Exchange chart shows that gold prices steadily trended upward for most of 2025. This indicates a structural rise rather than a temporary fluctuation, driven by various macroeconomic factors.

Global Factors Driving Gold Prices

Intensifying De-dollarization Trend

Major countries worldwide are expanding policies to reduce dependence on the dollar. China is actively promoting the internationalization of the yuan, increasing its share in trade settlements and utilizing currency swaps. India is also pushing for greater international use of the rupee. Countries like Russia and Iran, under sanctions, are trying to lower their reliance on the dollar through gold and non-dollar currencies.

In this de-dollarization movement, gold has emerged as the most important alternative asset. As the global influence of the dollar weakens, demand for gold naturally increases, leading to higher gold prices.

Rising Geopolitical Tensions

Historically, gold has been a choice for investors during crises. During the 2008 global financial crisis, demand for gold surged amid fears of a collapse of the financial system. During the European debt crisis in 2011, investors fled to gold for safety. In 2020, during the COVID-19 pandemic, gold hit record highs.

Recently, ongoing global conflicts such as U.S.-China trade tensions, Russia-Ukraine disputes, and worsening Middle East tensions have further strengthened gold’s status as a safe asset. The higher the uncertainty, the more upward pressure on gold prices.

Weakening Economies in Developed Countries

As major developed economies slow down, fears of recession grow. When the economy weakens, capital tends to shift from risky assets like stocks and bonds to safe assets like gold. Especially in stagflation scenarios—where inflation persists alongside economic slowdown—gold becomes a powerful hedge.

Impact of Interest Rate Cuts

Central bank interest rate cuts are a key catalyst for rising gold prices. Lower interest rates reduce the appeal of interest-bearing assets like deposits and bonds, decreasing the opportunity cost of holding gold. Additionally, rate cuts are often seen as signals of economic slowdown, further attracting investors to safe assets.

2026 Gold Price Outlook: Expert Opinions and Scenarios

Major financial institutions currently see a high likelihood of continued upward movement in gold prices into 2026.

JP Morgan’s forecast: predicts gold could reach $5,055 per ounce by the end of 2026, about 10% higher than current levels.

Goldman Sachs’ assessment: suggests additional gains are possible by mid-2026 but warns of increased volatility. The upward trend may continue, but with larger fluctuations.

HSBC’s outlook: is the most optimistic, projecting gold could hit $5,000 per ounce in the first half of 2026, though they also mention the possibility of price corrections in the second half.

Overall, the consensus is that the first half of 2026 will likely see continued increases in gold prices, with potential corrections starting in the second half, especially if the global economy recovers or if there are strong signals of interest rate hikes.

Factors Investors Should Monitor for Gold Price Fluctuations

If you decide to invest in gold, keep an eye on these variables:

Dollar trend: When the dollar weakens, gold prices tend to rise; when the dollar strengthens, gold tends to fall. The more aggressive the de-dollarization policies, the more upward pressure on gold.

Global interest rate trends: Central bank decisions and benchmark interest rates directly influence gold prices. Signals of rate cuts tend to boost gold demand.

Geopolitical events: International conflicts and political tensions often cause gold prices to spike. Monitoring these risks is essential.

Economic indicators: Data releases such as unemployment rates, inflation, and GDP growth can increase volatility in gold prices.

While the strong upward trend in 2025 is expected to continue into 2026, thorough risk management and quick market response are crucial. Investors should prepare for potential price corrections in the second half of 2026 by diversifying their portfolios and managing positions carefully.