Gold Price Outlook: Gold prices extended gains on Tuesday (November 25), extending their historic rally as expectations of a US Federal Reserve rate cut in December strengthened, pushing global gold rates to around $4,175 per ounce. The yellow metal continues to ride a powerful multi-month rally—one that analysts expect may extend into next year. Bank of America (BofA) now forecasts gold to average $4,538 per ounce in 2026, with a potential climb to $5,000, supported by macro tailwinds and sustained safe-haven demand.
Internationally, gold extended Monday’s strong performance, after climbing nearly 2% in the previous session. Spot prices hovered close to $4,175 per ounce, building on record highs driven by weaker yields, macro uncertainty, and safe-haven demand.
Back home, early trade on the Multi Commodity Exchange (MCX) saw gold rising more than 1%, tracking global gains as investors positioned themselves ahead of a potential shift in US monetary policy.
Expectations of a December rate cut surged following remarks from New York Fed President John Williams. Reuters noted that Williams signalled the possibility of easing policy soon, saying that cutting interest rates “won’t hurt the Fed’s fight against inflation” and would support broader economic stability. His comments boosted market confidence that the rate-hike cycle may be over.
According to the CME FedWatch Tool, traders now assign an 81% probability to a Fed rate cut in December—up sharply from 40% last week. Lower interest rates are typically bullish for gold because the metal does not carry a yield, and the opportunity cost of holding it decreases when rates fall.
Gold Extends Historic 2025 Rally
Gold has been on a remarkable upward trajectory this year, breaking $4,000 per ounce for the first time in history. The rally accelerated due to global economic uncertainty, geopolitical tensions, persistent inflation, and a weakening US dollar.
On October 7, 2025, gold futures touched an intraday high of $4,014.60 per ounce, and prices have since climbed further to new highs above $4,175. With gold outperforming nearly every major asset class in 2025, analysts believe the momentum could continue into the next year.
So far, Gold is up 54% in 2025, making it one of the strongest years for the precious metal in over a decade.
Gold Price Forecast for 2026: BofA Sees a Path to $5,000
Bank of America (BofA) expects the momentum in gold to continue into 2026, projecting an average price of $4,538 per ounce next year. The firm believes gold still has further room to run despite being described as both “overbought” and “underinvested,” signalling that institutional allocations remain relatively light even as prices climb.
BofA now sees a realistic pathway for gold to reach $5,000 per ounce in 2026, provided key macro forces remain supportive. These include elevated government debt levels, persistent inflation, lower interest rates, and the influence of unconventional US economic policies that have already contributed to gold’s historic rally.
The bank cautions that the biggest downside risk is a potential hawkish shift by the US Federal Reserve. If the Fed chooses to prioritise aggressive inflation control through higher interest rates, gold could face pressure due to the rising opportunity cost of holding a non-yielding asset. However, in the absence of such a policy reversal, BofA maintains a constructive outlook on gold’s long-term trajectory.
In its broader commodity outlook, BofA highlights five pressure points likely to shape the metals market in 2026: slowing demand from China, supply constraints in key mined metals, low global inventories, the possible resurgence of electrification and data-centre/AI-driven metal demand, and the continued impact of US economic policy decisions. Within this landscape, gold stands out as the metal with the clearest and most persistent tailwinds heading into 2026.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
