Gold Defies Expectations in 2026

Last year, we proposed our thesis on gold prices in 2026 and many of the headwinds we predicted came to pass. Despite this, gold has been surprisingly resilient, with a modest 1% gain. This is not as impressive as its strong performance in 2025, but it's remarkable given the challenging macro environment.

The first and most significant challenge was the path of US interest rates. The consensus view at the end of 2025 was that the Federal Reserve would cut aggressively in 2026, but inflation proved stickier than expected, keeping real yields positive. This removed one of gold's strongest tailwinds from 2025.

Another challenge was moderating inflation. While goods inflation fell sharply and energy prices stabilized, services inflation remained elevated but no longer threatened to break higher. The narrative shifted from persistent and dangerous to manageable and declining, which hurt gold's appeal.