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Gold's Bull Run May Pause in 2026, But Long-Term Outlook Shines

After a historic rally in 2025, gold prices may moderate in 2026 as the pace of US Federal Reserve rate cuts slows and geopolitical risks potentially ease. However, analysts from ICICI Direct see the long-term bull market remaining intact, with strong structural support from central bank buying and macroeconomic uncertainty. Prices are expected to find strong downside protection, unlikely to fall below $3,500-$3,600, while retaining upside potential toward $4,800-$5,000. Persistent concerns over Fed independence, global debt, and inflation continue to make gold an attractive hedge.

Key Points: Gold Price Outlook 2026: Fed Cuts, Bull Market Intact

  • Gold may cool in 2026 after 2025 surge
  • Fed rate cuts and independence fears support prices
  • Strong downside seen above $3,500
  • Upside potential to $4,800-$5,000 if risks rise
2 min read

Gold may cool in 2026 as US Fed cuts slow, but bull market seen intact: Report

Gold may see a breather in 2026 as Fed slows rate cuts, but analysts see strong support and potential for new highs amid macro uncertainty.

"Concerns over Fed independence will be supportive. - ICICI Direct Report"

New Delhi, January 6

After one of its strongest rallies in decades, gold prices may finally be due for a breather in 2026, however, analysts say the long-term bull case remains firmly intact, ICICI Direct Yearly Commodity Outlook said on Tuesday.

Analysts at ICICI Direct expect further US Federal Reserve rate cuts in 2026, and persistent concerns over rising global debt, and questions around long-term Fed independence are likely to keep gold attractive as a hedge against macroeconomic uncertainty.

"Concerns over Fed independence will be supportive. There are fears in the market that next Fed chair candidate would push for lower interest rate," the report said.

It sees strong downside protection for the yellow metal, with prices unlikely to fall below the $3,500-3,600 range even in a corrective phase. On the upside, gold could still test $4,800-5,000 levels if macro risks intensify or the dollar weakens further.

Gold surged more than 60% in 2025, hitting record highs as US rate cuts, aggressive central bank buying, geopolitical tensions, and concerns over US fiscal stability drove investors toward safe-haven assets. That sharp rise, however, has made prices vulnerable to profit-taking in the near term, with risk-reward now less attractive for fresh investors, it said.

Gold prices rallied sharply in 2025 and hit all-time high of USD 4550 as US Federal Reserve reduced rates by 75bps.

Analysts at ICICI Direct expect some moderation this year, especially if geopolitical risks ease or global trade tensions cool. Any meaningful progress toward peace between Russia and Ukraine, or stabilisation in US trade policy, could reduce the risk premium embedded in gold prices. Yet, a sharp correction appears unlikely.

Structural support for gold remains strong, led by sustained central bank buying as countries diversify reserves away from the US dollar. Global central banks have been adding roughly 1,000 tonnes of gold annually since 2022, with gold now emerging as the world's second-largest reserve asset after the dollar.

Also, persistent concerns about inflation and high government debt may continue to make gold valuable as hedge against uncertainties. Rising investment in ETF's and expectation of further weakness in dollar will provide support to the prices.

- ANI

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Reader Comments

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Priya S
As someone who invests in gold ETFs, this is useful analysis. The point about central bank buying is key. If countries are moving away from the dollar, that's a multi-year trend. A pause in 2026 doesn't change the long-term story. Might use any dip to increase my SIP in gold funds. 💡
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Rohit P
Respectfully, these reports always hedge their bets. "May cool... but bull market intact." It covers all bases! For the common Indian investor, the simpler advice is to keep doing what we do: buy some physical gold every year for security, regardless of short-term price forecasts from foreign banks.
S
Sarah B
Interesting global perspective. The connection between US Fed independence, debt, and gold is clear. From an Indian context, even if the dollar price corrects, the rupee price might not fall much if the INR weakens further. That's another layer of protection for Indian buyers.
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Vikram M
The 60% surge last year was crazy! No wonder a breather is due. My father always said, "Sona kabhi sasta nahi hota" (Gold is never cheap). He was right. Even if it cools to $3500, that's still very high historically. The era of cheap gold is over.
K
Karthik V
Good analysis, but it misses one major factor: Indian government policies on gold import duty and regulations. A change here can impact local prices more than any Fed move. Hope the budget doesn't tinker with duties too much.

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