|

Here's where Gold could head next after the WGC pencils in $5,000 as upside ceiling

  • Gold is expected to trade broadly range-bound around $4,100 during the second half of the year, according to the World Gold Council.
  • The precious metal could resume its upward trend, but it needs a clear catalyst.
  • Gold prices lost more than 11% in June, weighed by a revival of the US Dollar and a hawkish Fed stance.

Gold prices are expected to trade broadly stable in the second half of the year, seesawing within a 5% range from current levels of around $4,100 per troy ounce, according to analysts at the World Gold Council (WGC).

The precious metal, which experienced a rollercoaster ride in the first half of 2026, is now seen in line with macroeconomic consensus expectations and trading close to its fair value. 

“At current levels, gold’s price is broadly in line with a global backdrop of moderate growth, cooling but still elevated inflation, and expectations of further – but limited – central bank tightening,” the WGC said in its mid-year outlook report.

Bullish scenario possible, but not up to recent all-time highs

While the WGC outlook doesn’t project big swings in Gold prices as its baseline scenario, it considers the possibility of a breakout. That, however, would require a clear catalyst, namely worsening economic or geopolitical conditions, a reversal in interest-rate expectations, and/or long-term investor participation.

Such factors could propel Gold toward $4,500, but only a “strong, clear signal” may push it sustainably toward $5,000. In any case, WGC analysts don’t see the precious metal back to the $5,600 all-time high reached at the end of January.

Any further downside should be limited due to dip buying

Gold’s performance has been subdued in the past few months. The metal lost 11% in June, and, when looking at the broader period between April and June, it posted its steepest quarterly retreat since 2Q 2013. 

The WGC notes that several factors could still drag the commodity further down. These are US Dollar strength, rising interest rates beyond current expectations, an improvement in market risk sentiment, and technical factors. 

Still, the maximum decline expected is of 15% from current price levels as, historically, “lower prices trigger buying from various sectors.”

Central banks provide support amid India wild card

The World Gold Council's data signals a strong link between Gold returns and central bank buying. The analysis suggests that, all else equal, an additional 20 to 30 tonnes increase in reserves above the long-term average of around 600 tonnes per year should translate into approximately a 1% increase in prices. 

While in the first quarter of the year many central banks opted to sell Gold to face the economic fallout from the Iran war, a recent survey suggests that sovereigns’ appetite for buying Gold remains firm.

India’s role in the Gold market is also key as the country is the second-largest consumer of the precious metal. In May, Indian Prime Minister Narendra Modi urged the nation’s citizens to avoid buying Gold for a year, in an effort to cut spending and save foreign exchange as the country grapples with the macroeconomic consequences of the Iran war. It also has adopted a series of measures to reduce imports of this commodity, including a sharp increase in duties.

The WGC analysis suggests that the country’s import duty increases alone will reduce jewellery, bar and coin demand by 50 to 60 tonnes, or about a 10% decline year-over-year.

“We believe the impact from the increased duty should already be reflected in the Gold price. But further economic deceleration could impact Indian gold demand through the well-established income effect, deterring Indian consumers and investors from taking advantage of pullbacks to enter the market,” the report said.

Gold market dynamics

The WGC also points out that much of Gold’s recent market movements have occurred during the Asian and American sessions. More specifically, many of the pullbacks happened during US hours, while rebounds generally occurred during Asian hours.

“This further highlights the increasingly relevant role that Asian investors (and consumers) play in price discovery and direction,” the report added.

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

More from Dhwani Mehta
Share:

Editor's Picks

AUD/USD accelerates the decline below 0.7000

The late rebound in the Greenback has prompted the AUD/USD’s selling pressure to gather extra steam on Wednesday, sending spot to the mid-0.6900s for the first time since late July. In addition, inflation figures in Oz failed to surprise markets, leaving the pair vulnerable to extra weakness. On Thursday, the focus of attention on the domestic calendar will be on the release of the trade balance results in August.

USD/JPY stays weak below 157.00 amid Japanese intervention risks

USD/JPY keeps losses below 157.00 in the Asian session on Wednesday, as hawkish BoJ expectations, along with intervention risks, underpin the Japanese Yen, countering dismal domestic factory output and retail sales data. Meanwhile, a broad US Dollar retreat also collaborates to the pair's downside.

Gold meets resistance just above $4,200

Gold now makes a U-turn and recedes toward the $4,150 region per troy ounce on Wednesday. Indeed, the precious metal fades the earlier move past the key $4,200 yardstick and retreats marginally as the US Dollar trims part of its daily losses amid mixed US Treasury yields.

Bitcoin and Gold Outlook: BTC recovers $84K, XAU slips amid softer US PCE
Bitcoin (BTC) gains traction, rising above $84,000 on Wednesday as buyers return after softer-than-expected United States (US) inflation data. The Crypto King marks a second straight day of gradual recovery, building on the demand area between $82,000 and $83,000. Gold (XAU/USD), meanwhile, slides toward $4,100 after being rejected at the daily high of $4,219.
The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082. The decline reflects a powerful combination of US Dollar strength, geopolitical uncertainty and renewed concerns about Europe's exposure to higher energy prices.

The Euro is near a one-year low: Inflation could trigger its rebound, not its fall

EUR/USD has fallen to its lowest level since May 2025, but a fresh inflation shock in the Eurozone could give the Euro (EUR) an unexpected lifeline. The pair hit 1.1312 on Wednesday and trades well below the January peak of 1.2082.