• The gold market experienced extreme volatility in 1H26, with prices surging to a new record high early in the year before dropping sharply, reflecting how quickly market drivers can shift. A key source of pressure on the gold market has been the unrest in the Middle East, which drove up energy prices and heightened inflation risks, leading the market to expect a more hawkish monetary stance from the Fed. Notably, despite high and prolonged geopolitical risks in the Middle East, gold failed to draw its usual support as a safe-haven asset, as investors weighted economic impacts, inflation outlook, and monetary policy trajectory far more heavily.
• For 2H26, KResearch expects global gold price trends to remain primarily dependent on developments in the Middle East and the outlook for the Fed’s policy rate. If geopolitical risks and US inflationary pressure ease before year-end, the Fed may not need to rush to raise interest rates, potentially relieving pressure on the gold market.
• Nevertheless, persistent global economic risks and uncertainties mean that gold will continue to play a vital strategic role for both private investors and central banks worldwide. As a result, sustained demand from these groups is expected to remain a key factor supporting gold prices.
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