Precious metals appear set for a strong start to 2026. Prices rose on Friday, rebounding from year-end declines as geopolitical tensions and expectations of U.S. interest rate cuts lifted investor demand for bullion.
“Precious metals have kicked off 2026 on a firmly positive note….after a bout of profit taking in the last days of 2025, bulls seem to be drawing strength from geopolitical risk and hopes of lower U.S. rates this year,” said Lukman Otunuga, senior research analyst at FXTM.
Spot gold climbed 1.7% to $4,386.99 per ounce, as of 1003 GMT, after hitting a record high of $4,549.71 on Dec. 26, It had dropped to a two-week low on Wednesday.
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“Gold prices are expected to move higher in 2026 – we target a move to USD 5,000/oz – driven by lower real yields, ongoing global economic concerns, and uncertainty surrounding U.S. domestic policy,” said UBS analyst Giovanni Staunovo.
“Both central banks and investors are likely to continue favoring real assets like gold for its freedom from counterparty risk.”
In such environments, gold and other precious metals seem to often benefit as risk appetite for equities and higher-yielding assets weakens. Silver, platinum, and palladium also found support.
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Another major factor driving prices was growing optimism that the U.S. Federal Reserve may begin cutting interest rates later in 2026 as inflation shows signs of easing and economic growth moderates. Lower interest rates typically enhance the appeal of non-yielding assets like gold by reducing the opportunity cost of holding them compared with bonds or cash. As a result, expectations of loser monetary policy have helped underpin bullion prices.
The early rebound also reflected fresh positioning by investors at the start of the year, following profit-taking and portfolio adjustments in late December. Many investors use the turn of the year to reassess asset allocations, often increasing exposure to commodities as a hedge against inflation and market volatility.
Analysts say precious metals are likely to remain sensitive to geopolitical developments, central bank signals, and macroeconomic data. If global tensions persist and rate cut expectations strengthen, bullion could continue to find support in the months ahead.