ANZ Bank has lowered its gold price forecast for the end of 2026 to $5,600 per ounce, compared to its previous estimate of $5,800. However, the bank maintained its positive long-term outlook for the precious metal, driven by ongoing geopolitical tensions and the rising probability of a global economic slowdown.
The bank expects gold to continue its upward trajectory to reach $6,000 per ounce by mid-2027, supported by expectations that global central banks will pivot toward more flexible monetary policies as global economic growth slows due to the ongoing conflict in the Middle East and high energy prices.
In a recent report, the bank's analysts, Soni Kumari and Daniel Hynes, explained that gold’s path over the next 12 months will pass through three distinct phases, each carrying different implications for price movements.
Phase One: Inflationary Pressures and Interest Rate Halts
The report indicated that the first phase will witness persistent inflationary pressures resulting from high crude oil prices. This will prompt the US Federal Reserve to pause interest rate cuts, with expectations holding rates unchanged until next September.
The bank believes that sustained high yields on US Treasury bonds may temporarily cap gold's gains, given the reduced appeal of non-yielding assets. However, it emphasized that the $4,500 per ounce range represents a crucial support level, which could offer an attractive entry point to build new investment positions should prices drop to that level.
Phase Two: Economic Slowdown and Shifting Focus
In the second phase, the report expects the repercussions of high energy prices to impact the broader global economy, triggering a slowdown in industrial activity and a decline in consumer spending, which will gradually weaken global economic growth rates.
The bank explained that this phase marks a turning point for the markets, as investor focus will progressively shift from inflation risks to the risks of economic slowdown and decelerating growth.
Phase Three: Monetary Easing and Structural Support
The third phase involves global central banks cutting interest rates and adopting growth-supportive monetary policies in response to mounting economic pressures. This shift will bolster gold's attractiveness as real yields fall and the opportunity cost of holding the precious metal decreases.
The bank stressed that these factors will provide robust long-term support for gold, even with the potential for periods of market volatility or temporary corrections.
Long-Term Structural Drivers
The report highlighted ongoing structural factors supporting gold, including deteriorating fiscal conditions in several major economies, a growing trend among central banks and investors to diversify reserves away from the US dollar, and escalating global geopolitical uncertainty.
Furthermore, the bank expects central banks to continue purchasing gold at a steady pace in the coming years, viewing it as one of the most vital defensive assets and safe havens amid global economic and political volatility.
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