HSBC's 2026 Gold Outlook: An In-Depth Analysis of Market Trends

Article Highlights

• HSBC's positive outlook on gold prices driven by continued demand from central banks and retail investors.
• The impact of global uncertainty and dollar devaluation on rising gold prices.
• The role of gold ETFs in attracting retail investors.
• Analysis of the relationship between gold prices and the stock market, and US Treasury yields.
• Downside risks to the bullish gold outlook from a Federal Reserve (The Fed) perspective.

HSBC's Gold Forecast to 2026: A Detailed Look

Rodolphe Bohn, a currency and commodity strategist at HSBC, pointed out that gold is still on an upward path, driven by strong demand from central banks and retail investors, despite recent market volatility. Central banks and gold ETFs continue to buy gold.

In HSBC's "Imagine the Future 2026 Outlook" report, Bohn stated that despite gold's stunning year-to-date performance and recent increased volatility, the bank remains positive about gold prices in the coming months.

"We believe that investors can benefit from gold to diversify global asset (especially FX) risks," he wrote. "It is resilient in times of significant turmoil and has the potential for further appreciation."

Bohn pointed out that gold is having one of its best years ever, with year-to-date gains of approximately 54%. He said, "This extraordinary growth is primarily attributable to rising global uncertainty and concerns about dollar devaluation."

After hitting a historical high in October, near $4380 per ounce, profit-taking by retail investors caused gold prices to drop to $3885 two weeks later. Bohn said, "After a period of consolidation near $4000/oz, gold prices seem to have resumed their upward trend, mainly driven by market speculation that economic data delayed due to the US government shutdown might support the Fed cutting rates again in December."

He cautioned that while the current rebound is encouraging, the market may experience further consolidation in the near term. "Subsequently, the upward trend may gradually resume, and prices will maintain a slow upward trajectory," he said. "Despite improved global sentiment and rising global equity markets, current market conditions continue to provide a favorable backdrop for gold prices."

"We believe that gold will continue to benefit from strong central bank demand, continued concerns about a weaker dollar, and continued interest in gold ETFs," he added. "Against this backdrop, gold remains an essential diversification tool in portfolios, helping clients navigate ongoing global uncertainty."

Bohn believes that central bank gold purchases are likely to continue, but he expects the pace to slow. "Since 2022, the proportion of gold in global central bank reserves has grown significantly," he wrote. "In 2022, gold accounted for approximately 13% of these reserves, and this proportion rose to approximately 22% by the second quarter of 2025. During this period, gold prices rose by approximately 125%, from $2000/oz to over $4000/oz."

He pointed out that high prices do not appear to be affecting central bank purchases.

"The primary driver for central banks is diversification and hedging against global risks," Bohn said. "Since 2022, global uncertainty has increased significantly, including geopolitical conflicts, economic and fiscal challenges, rising inflation, and major political shifts, all of which are prompting central banks to restructure their reserves. In addition, the growing uncertainty surrounding the U.S. economy, whether political, international, economic, or fiscal, has triggered negative sentiment toward the dollar. As a result, central banks have reduced their dollar exposure, enabling them to purchase gold more rapidly."

Bohn referred to the increase in central bank gold reserves as a "key structural factor" supporting gold prices. "As institutional entities with sound long-term strategies, central banks are unlikely to rapidly change the current framework," he said. "Therefore, their continuous and steady purchases are expected to establish a price floor, keeping gold prices at a higher level. While they may slow down their buying pace, the possibility of large-scale selling is extremely low," he added. "Central banks are unlikely to sell gold to acquire other currencies, reducing the likelihood of downward gold price volatility."

HSBC also believes that retail investor demand will play a crucial role in shaping the gold outlook, especially in the short term. "Since mid-2024, demand for gold ETFs, as a way to invest in gold without having to purchase physical metal, has been positive," Bohn wrote. "The same factors driving central banks to increase their gold reserves are also influencing retail investors, significantly boosting their interest in investing in gold."

Bohn pointed out that the economic backdrop also looks supportive.

"While intuitively, there is a negative correlation between gold prices and the dollar and US Treasury yields, i.e., a stronger dollar makes gold more expensive, thereby reducing demand, and rising yields increase the opportunity cost of holding non-interest-bearing gold, the positive correlation between gold and stock indices is less straightforward," he said. "Gold is traditionally the preferred safe-haven asset, so it often moves inversely to stock indices. But recently, gold prices have fallen along with stock indices because market participants are selling gold to cover stock market losses."

Bohn pointed out that when gold prices are at historical highs, the positive correlation with the stock market is stronger, but this does not mean that gold has lost its safe-haven status, "We believe that gold remains a protective asset."

"Despite this positive correlation with the stock market, we remain confident in our bullish view of gold, expecting prices to rise in the coming months," he said. "While our view on the dollar remains neutral, we perceive downside risks. With the Fed resuming rate cuts, and the resolution of the U.S. government shutdown issue increasing the likelihood of further rate cuts as early as December, we may witness further strength in gold prices."

However, Bohn acknowledged that HSBC's positive outlook also faces downside risks, "If the Fed unexpectedly takes a more hawkish stance, or if global economic conditions improve despite the current positive correlation". He concluded by saying: