MUFG Sees Gold Anchored Near $4,000 Through 2026

Gold prices are projected to remain broadly anchored around the $4,000 mark through 2026, according to Japanese banking group MUFG, as the Federal Reserve's rate hold offsets pressure from elevated US bond yields.

The precious metal entered the weekend close at roughly $4,040 an ounce after a turbulent stretch around the latest Fed decision. XAU/USD rallied 1.5% on Wednesday and added 0.5% on Thursday, only to shed 1.6% on Friday, netting a 0.85% gain for July. Gold remains about 6.4% lower since the start of 2026.

MUFG's 2026 Outlook: A Broad Range Around $4,000

MUFG noted that gold held near $4,060 after the Fed left rates unchanged, easing pressure on non-yielding assets. But the bank cautioned the broader picture remains one of restraint rather than breakout. Expectations of higher-for-longer interest rates and persistent Middle East tensions are likely to keep the metal trading within a broad range around the USD 4,000 per ounce level.

The near-term outlook is finely balanced. Softer Treasury yields and sustained geopolitical demand should help defend the $4,000 area, while renewed Fed tightening expectations would make it harder for gold to build a lasting move higher.

A Historic Rally Sets the Stage

Gold is coming off one of its most extraordinary runs. According to the World Gold Council's Gold Outlook 2026 report, the metal set more than 50 all-time highs in 2025 and posted a year-to-date total return of 61% as of 28 November, putting the rally on track to be gold's fourth strongest annual return since 1971. This occurred even as the US dollar and 10-year real yields remained cyclically high.

The World Gold Council's Gold Return Attribution Model shows geopolitical risk and US dollar weakness together accounted for roughly 16 percentage points of gold's 2025 return. Price momentum and investor positioning added nine points and economic growth contributed ten.

Four Scenarios for 2026

The World Gold Council's outlook lays out four scenarios, all referenced against the average LBMA Gold Price for November 2025. Under a macro consensus scenario, where global GDP growth holds at 2.7% to 2.8% and the Fed delivers roughly 75 basis points of additional rate cuts, gold could trade within -5% to +5%.

A shallow slip could push gold 5% to 15% higher, while a deeper doom loop slowdown could drive gains of 15% to 30%. A reflation return scenario, driven by successful Trump administration policies, could see gold drop 5% to 20%.

Structural Support and Rising Tail Risks

Central bank gold buying remained well above historical averages in 2025, even if below the record levels of the prior three years, providing a structural floor. The World Gold Council also flagged potential new buyers, such as insurance companies in China and pension funds in India, that could further support the positive trend. Rising tail risks, as indicated by increasing kurtosis and skew in the S&P 500, suggest demand for hedges is unlikely to fade quickly.