Will gold prices extend their record-breaking run?

Will gold prices extend their record-breaking run? July 16, 2026In recent years, the price of gold has climbed steadily. Aside from the current market blip (see chart below), an upward trend has been going for years. Since 2020, the price of gold has risen from $1,585 per ounce to more than $4,500 per ounce. Money should not lose value through inflation. Ideally, it should grow on its own because of interest. But such investments are looking less promising right now, as central bank interest rates are relatively low. As a result, investors seek a safe place to park their wealth — and precious metals are one option they turn to. Increased demand naturally pushes up prices. Economists at Deutsche Bank have shown that central banks around the world are increasingly buying gold. In a study published on April 27, they found that China, Russia, India and Turkey, as well as central banks in emerging markets, are increasing their gold reserves. As a result, gold could reach $8,000 per ounce by 2031 — twice its current price. A new player: cryptocurrencies Before predicting the future, it is worth stopping to ask what is behind the current gold rally. Frank Schallenberger of Landesbank Baden-Württemberg (LBBW) cites "expectations of interest rate cuts and a weaker US dollar, strong purchases by central banks, as well as high demand for coins and bars" as key factors behind soaring gold prices. There is also a relatively new market participant, Schallenberger told DW: cryptocurrencies. They are becoming "an increasingly important new source of demand, as they are also diversifying their assets, including buying gold. If this continues, it could provide further momentum for gold prices." Michael Hsueh, a precious metals analyst at Deutsche Bank Research and one of the authors of the previously mentioned study, distinguishes between "inelastic" and "elastic" buyers. He says he has observed that stable, inelastic buyers such as central banks have pushed out more price-sensitive "elastic" customers, including private buyers such as jewelry purchasers. This steady demand has been a "key factor behind gold's strength between 2021 and 2025." Thomas Kulp, a research analyst at DZ BANK, told DW that the "main driver of the gold price rally in recent years has been the accumulation of geopolitical uncertainty." The gold market's "safe-haven" appeal, on the one hand, and its status as a guarantee of independence, on the other, have been key drivers of demand. Is the classic 'safe haven' still safe? Gold has long been considered a reliable way to protect wealth. It cannot generate returns on its own and is subject to speculation — but the precious metal is certainly safer than hiding cash under a mattress. But, Schallenberger, warns that its safe-haven reputation is sometimes exaggerated. Holding large amounts of gold is not a good idea, he argues, though it can still serve as a hedge: "A share of five or 10% gold in a portfolio is certainly not a bad idea because it can reduce a portfolio's volatility." Michael Hsueh of Deutsche Bank Research takes a different view: "We believe it makes sense to hold gold on a large scale as a store of value. The main reasons for reserve managers (at central banks, ed.) to add gold to their portfolios are diversification, protection against geopolitical risks and a hedge against inflation." Thomas Kulp of DZ Bank is in little doubt about gold's value in stabilizing investments. "Gold is and remains the ultimate safe haven. In uncertain periods or times of crisis, the precious metal is usually in demand." But this does not always apply, he says, as the price can be subject to "sometimes significant fluctuations" — something "investors should always keep in mind when deciding what to do with their assets." Peering into the crystal ball Making predictions always involves a degree of uncertainty. That is true when filling out a lottery ticket or when forecasting economic developments. If predictions were usually correct, there would be no economists or business journalists — but many more multimillionaires. So do the experts interviewed here share Deutsche Bank Research's outlook? Frank Schallenberger certainly does not: "The strong gold rally, which came to a temporary halt at the end of January, was supported by heavy buying of gold ETFs as well as significant increases in central bank gold holdings. But both groups have recently lost some momentum. At current price levels, I don't see sufficiently strong drivers that would allow gold prices to double over the next five years." But Michael Hsueh, co-author of the Deutsche Bank Research study, stands by his forecast. "We examined gold accumulation by emerging market central banks as a potential long-term driver of gold prices," Hsueh told DW. He expects central banks to continue rebuilding their gold reserves as part of what he calls the "return of history" — a period marked by rising geopolitical tensions reminiscent of the Cold War. These more uncertain times, he argues, could lead central banks back to the lower end of the pre-1990 range, with gold accounting for around 40% of their reserves. "Assuming emerging market foreign exchange reserves decline from $8 trillion to $5 trillion, this could correspond to a nominal gold price of $8,000 per ounce." DZ Bank analyst Thomas Kulp is more cautious. "Given developments over the past few years, such forecasts are not surprising," he said. But he also sees no reason for pessimism: "Over the next 12 months, we expect gold prices to return to the $5,000-per-ounce level. The fundamental drivers of demand remain intact. That is why we also maintain a positive long-term outlook for gold prices." This article was originally published in German.