Gold To Touch $5,000 In 2026, Says HSBC On Safe Haven Demand Amid Volatile Geopolitics
A softer US dollar, policy uncertainty and concerns around ballooning fiscal deficits — particularly in the US — are encouraging investors to seek protection in bullion.
Gold's blistering rally may not be over yet. According to HSBC Research, bullion prices could test $5,000 per ounce in the first half of 2026, driven by geopolitical risks, mounting fiscal pressures, and sustained institutional demand. This is even as volatility stays elevated, and pullbacks remain likely.
Gold ended 2025 at record levels, touching $4,548/oz on December 29, capping a year marked by extreme price swings. HSBC expects that momentum to carry into early 2026, though the path higher is unlikely to be smooth.
Safe Haven Demand Still Dominant
HSBC says the rally continues to be fuelled by a potent mix of safe-haven flows and risk-off positioning. A softer US dollar, policy uncertainty and concerns around ballooning fiscal deficits — particularly in the US — are encouraging investors to seek protection in bullion.
Institutional demand has been a key driver. Heavy buying in ETFs, OTC markets and futures by real-money investors and momentum-driven funds has more than offset weakening physical demand so far. However, HSBC cautions that long positions on the CME are elevated and vulnerable to bouts of liquidation, setting the stage for sharp corrections.
"Trading is likely to be characterised by high volatility and wide ranges," the bank says, noting that rallies could stall if expected rate cuts fail to materialise.
Geopolitics, Central Banks, And Trade Frictions
Geopolitical risk remains the standout pillar of gold’s strength. Ongoing conflict in Ukraine, tensions in the Middle East, US–China rivalry and shifts in US foreign policy continue to support bullion. Any escalation could provide further upside, while a de-escalation in geopolitical stress could quickly cool prices.
Central banks are expected to remain net buyers in 2026, driven by diversification away from the dollar and geopolitical considerations. However, HSBC believes official-sector buying may moderate from the peaks seen between 2022 and 2024, partly because high prices could dampen appetite.
Supply Rises, Physical Demand Weakens
High prices are beginning to reshape the supply-demand equation. HSBC expects mine output to rise in 2026–27 despite operational challenges, while recycling is also likely to pick up. At the same time, jewellery, coin and small-bar demand has weakened sharply, particularly in price-sensitive markets such as India and China.
So far, these physical headwinds have failed to derail the rally. But HSBC warns that if investor demand slows later in 2026, excess physical supply could start to weigh on prices.
A Golden Port — But Not A One-Way Bet
Beyond that, the outlook becomes more nuanced. As the US Federal Reserve’s rate-cutting cycle ends, physical demand remains soft and supply increases, the rally could begin to flag in the second half of 2026.
A significant portion of recent inflows, HSBC notes, appears driven by FOMO. That makes gold vulnerable to sharp reversals. Still, the bank does not foresee a major collapse, arguing that geopolitical uncertainty, fiscal stress and doubts over monetary policy independence continue to underpin bullion’s long-term appeal.
