Gold has long thrived on anxiety, and in 2025, it didn’t disappoint. Over the course of the year, gold surged to more than 50 all-time highs, delivering a robust return of over 60%. Investors, from institutional funds to central banks, flocked to the precious metal as a haven from economic ambiguity and geopolitical anxiety.

With its fourth-strongest performance in more than half a century, gold now stands at a crossroads. The World Gold Council’s newly released Gold Outlook 2026 poses a simple but essential question for investors: push ahead or pull back?

The outlook suggests the road ahead is anything but linear. While the current price reflects a broad market consensus of moderate growth, falling inflation, and a modestly stronger US dollar, the report makes clear that markets rarely follow the script.

This isn’t just about price; it is also about perception. Gold’s reputation as a store of value, a hedge against uncertainty, and a strategic portfolio anchor will be tested again in the coming year.

That was certainly the case in 2025. The rally wasn’t driven by any single catalyst, but by a potent mix of dollar weakness, marginally lower real rates, growing geopolitical tension, and a collapse in confidence across key risk assets.

Gold, buoyed by positive price momentum, and the fear of missing out, became the fallback asset choice across continents. Central banks remained steady buyers, though not at a record pace. Investment flows into gold ETFs were also strong, but with room still to grow, suggesting investors may not be done yet.

Despite its strength, the World Gold Council stops short of predicting a straight continuation of this year’s rally. Instead, it outlines a series of possible paths, each pointing to a very different outcome for gold in the year ahead.

If the global economy slows more sharply than expected, the metal could continue its climb. If the slowdown deepens into a crisis, with renewed geopolitical risk or fractures in global trade, gold could soar. But if the Trump administration’s policies deliver on promises of reflation and growth, higher yields and a firmer dollar, gold could to retreat.

A metal in the middle

Beyond these high-level macro scenarios lie less predictable but equally influential factors. One is central bank demand, which is still strong. Emerging markets, in particular, remain significantly underweight in gold reserves compared to advanced economies.

If risk sentiment deteriorates, this demand could intensify, offering structural support for gold even in less volatile environments.

Recycling dynamics are another wildcard. In India, where over 200 tonnes of jewellery were pledged as collateral in the formal financial system this year, secondary supply has remained constrained.

Should the economy remain stable, this “locked” gold may stay out of circulation. But if distress rises, particularly under a severe global downturn, it could re-enter the market in significant volumes, creating price pressure from the supply side.

Yet perhaps the most compelling thread in the 2026 outlook is the reminder that gold continues to derive strength from uncertainty itself.

Volatility is not an occasional shock anymore; it’s becoming structural. The rise of geopolitical flashpoints, the unpredictability of US policy, and a global financial system still learning how to operate in a post-pandemic, AI-influenced environment, all feed directly into the case for gold as a strategic asset.

Gold will enter 2026 in the shadow of economic uncertainty. As in 2025, volatility across global markets is expected to remain elevated.  While current prices reflect a rangebound consensus, softer growth, looser monetary policy, and persistent geopolitical risks could yet continue to support gold.

Investment demand still remains strong, with room to expand, and central bank buying may offer further support, though shifts in recycling flows could also create headwinds.

According to the Royal Canadian Mint in its marketing spiel for its 2026 lunar year of the fire horse, pure gold coin, “the hard-working equine steps assuredly towards success without breaking its stride”, traits that may well define how investors approach gold in the year ahead.

In a world where shocks are increasingly common, many investors are likely to stay allocated to gold. Its role as a portfolio stabilizer and hedge remains as relevant as ever.