Bullish Outlook for Precious Metals Amid Persistent Global Tensions
A major financial institution has issued a bullish long-term forecast for gold prices, predicting the precious metal will reach record highs by the end of 2026. The analysis highlights increasing geopolitical conflicts and ongoing economic uncertainty as key drivers of gold’s anticipated price appreciation. “We believe significant commodity price adjustments are creating attractive opportunities for economic improvement later this year and into 2026,” analysts noted in their report. “We expect improving US economic conditions in late 2025 will boost demand for commodities, particularly those more sensitive to cyclical trends.”
The report specifically recommends investors shift toward sectors that could benefit from an improving macroeconomic environment, with energy and precious metals singled out as particularly promising areas. The analysts emphasize the need to adjust investment portfolios to hedge against policy and geopolitical uncertainties that have become increasingly prevalent.
Escalating Policy Uncertainty Reaching Historic Levels
The analysis points to rapidly changing economic policies as a major source of market disruption. “Over the past few months, economic policy changes have been occurring at a rapid pace, unsettling both investors and capital markets,” the report states. Beyond the complexities of reshaping global trade orders, analysts express caution about continuing regional conflicts in Eastern Europe and the Middle East, along with persistent geopolitical tensions. Notably, they highlight that since the 2024 election, US economic policy uncertainty has escalated dramatically, particularly due to tariff-related volatility, recently surpassing levels seen during the 2020-2021 pandemic peak.
[Figure: US Economic Policy Uncertainty Index showing significant increase post-election]
The analysts contend this uncertainty will likely continue driving gold prices higher over the next two years. “We believe economic uncertainty and geopolitical tensions will sustain strong demand for gold from both private investors and global central banks through 2026 (central banks currently account for 21% of global gold demand). Lower US short-term interest rates and a moderate rebound in the dollar should reinforce gold’s upward trajectory.”
However, they issue an important caution: “Investor optimism about gold price increases has reached levels historically associated with significant subsequent corrections.” As such, they recommend a patient approach: “We prefer to accumulate positions patiently during price declines.”
Strategic Asset Allocation Recommendations
The analysts advise investors to focus on asset quality rather than speculative plays, recommending diversification through commodities like precious metals that have demonstrated significantly better performance than broad equity indices. “Between February 19 and April 21, 2025, as tariff uncertainty spiked, the Bloomberg Precious Metals Index rose 12.1% while the S&P 500 (total return) declined 15.8%. With ongoing tariff uncertainty, precious metals are likely to continue serving as an effective hedge.”
Price Forecast: Near-Term Correction Followed by Long-Term Gains
While maintaining their bullish long-term outlook, the analysts predict a near-term price correction before gold reaches its projected highs. They expect prices to retreat modestly by year-end to a range of 3,000−3,200 per ounce before resuming their upward march. Their base case scenario calls for gold to achieve a new all-time high of $3,600 per ounce by the end of 2026.
This forecast reflects a confluence of factors including persistent geopolitical risks, ongoing economic policy uncertainty, and favorable macroeconomic conditions expected later in the forecast period. The analysts’ recommendation to accumulate positions during price dips rather than chasing rallies suggests they anticipate potential volatility in the short term but remain confident in gold’s long-term price appreciation potential as these fundamental drivers persist.
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