Gold prices ease but outlook for 2026 remains strong

Gold dipped slightly as dollar strengthened but stayed near highs; softer U.S. inflation boosts Fed rate cut hopes, with Goldman projecting $4,900/oz by 2026

Gold prices slipped slightly on Friday as a stronger U.S. dollar and year‑end investor positioning weighed on sentiment. Despite the minor decline, bullion remained on track to end the week higher, supported by softer U.S. inflation data that has strengthened expectations of interest rate cuts in 2026.
Spot gold fell 0.1 per cent to $4,326.37 an ounce, while U.S. gold futures dropped 0.2 per cent to $4,354.80. Even with the dip, gold was set to record a weekly gain of 0.6 per cent, rebounding close to the record highs seen in October. Analysts noted that the pressure was largely seasonal, with investors adjusting portfolios ahead of the holidays.

Silver continued to outperform, rising 0.8 per cent to $65.93 an ounce. It was poised for a 6 per cent weekly gain after hitting an all‑time peak of $66.88 earlier in the week. Driven by robust industrial demand, silver has surged 128 per cent year‑to‑date, far outpacing gold’s 65 per cent annual rise.

The dollar’s climb to one‑week highs made bullion more expensive for holders of other currencies, adding to short‑term pressure. However, recent U.S. economic data has bolstered optimism for monetary easing. Consumer prices rose 2.7 per cent in November, below the forecast of 3.1 per cent, raising hopes that inflationary pressures are easing. Federal Reserve officials, including Chicago Fed President Austan Goolsbee, suggested that sustained moderation in inflation could pave the way for further rate cuts.

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Market futures reflected a slightly higher probability of a rate cut at the Fed’s January meeting. Analysts believe such moves would provide cyclical support for gold prices in the coming year.

Looking ahead, Goldman Sachs projects gold prices could climb 14 per cent to $4,900 per ounce by December 2026. The brokerage cited structurally high demand from central banks and potential support from U.S. monetary easing as key drivers of the bullish outlook.
Other precious metals also posted gains. Platinum rose 0.2 per cent to $1,919.41 after touching a 17‑year high, while palladium held steady at $1,695.22, marking its best week since September 2024.

The broader precious metals market remains buoyant, with gold expected to benefit from both macroeconomic trends and sustained institutional demand over the next two years.

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