The recent pullback in gold prices has sparked concerns among investors about the possible end of the long-running bull cycle. However, experts from the World Gold Council argue that the correction does not signal a structural reversal, as fundamental drivers supporting the precious metal remain intact. Geopolitical tensions, global trade risks, and the direction of U.S. Federal Reserve policy are expected to continue underpinning the gold market throughout 2026.
Shaokai Fan, Regional Director for Asia–Pacific (excluding China) and Global Head of Central Banks at the World Gold Council, noted that gold has reacted strongly to global economic and geopolitical instability. The metal’s surge above $5,000 per ounce demonstrated its enduring role as a safe-haven asset.
According to Fan, investors should focus on two major factors:
Escalating geopolitical risks, particularly those linked to Greenland and other flashpoints.
Concerns over the independence of the Federal Reserve, as the nomination of a new chair could influence interest-rate expectations.
“If these factors persist, gold prices are likely to remain resilient at elevated levels,” he said.
Gold has experienced dramatic swings in recent months, climbing from $4,500 to $5,000 per ounce within a week, then hitting a record $5,600 before retreating below $4,600. Such moves have raised questions about whether the uptrend has run its course.
Fan believes the decline represents a technical correction after an overheated rally rather than the end of the bull market. Speculative activity remains present, while demand for hedging has not weakened.
Similar pullbacks, such as the one seen in October 2025, should be viewed as opportunities to accumulate through gold ETFs or central bank purchases, he added.
One of the most influential drivers for gold is the outlook for U.S. monetary policy. If the Fed moves toward easing, the opportunity cost of holding non-yielding assets like gold would decline, potentially drawing more capital into the market.
Global trade policy uncertainty also tends to lift demand for safe-haven assets, with gold traditionally the preferred choice.
Fan cautioned against relying solely on past cycles to predict the future. In 1979, gold volatility was even more extreme than today. What matters, he said, is the current environment in which many previously stable factors have become unpredictable.
Despite high prices, central banks remained major buyers, adding 863 tons of gold in 2025. While below the previous peak of over 1,000 tons, the figure confirms that accumulation is ongoing. The fourth quarter alone accounted for 230 tons.
Poland has recorded strong net purchases for two consecutive years and plans further increases.
Kazakhstan shifted from selling to buying to hedge risks.
Brazil, Indonesia, and Guatemala returned to the market after a period of absence.
These trends counter rumors of widespread profit-taking by large funds.
The World Gold Council expects several supportive factors to persist in 2026:
Unresolved geopolitical tensions
Rising global trade risks
Expectations of a Fed pivot toward easing
Continued demand from central banks and ETFs
Fan emphasized that gold should be seen as a portfolio balancing asset rather than merely a speculative instrument. Corrections offer strategic entry points for institutional investors and central banks to expand holdings.
Monitor Fed communications and U.S. inflation data
Track flows into and out of gold ETFs
Follow central bank purchase trends
Avoid emotional trading during periods of high volatility
Although gold prices have undergone a dramatic correction, the medium-term outlook remains constructive. Geopolitical uncertainty, monetary policy shifts, and safe-haven demand continue to provide a solid foundation.
Rather than signaling a deep downturn, the current phase appears to be a necessary consolidation after an intense rally. Looking toward 2026, gold is expected to retain its central role in asset allocation strategies for both individual and institutional investors.
.png){kind=logo}
Tiếng Việt
English
