Bubble Worries Fail to Break Wall Street’s Gold Dust Fever

All that glitters may actually be gold, at least through the end of next year. After that, traditional wisdom still applies.

The precious metal beloved by safe-haven investors and people eager to reinstitute the gold standard has more than doubled in price over the past two years, its best run since the energy crisis of 1979. Forecasts see the rally continuing through December 2026, though one analysis warns that gold’s boom alongside a runup in equities may warrant caution.

Double Trouble

At roughly $4,360 per ounce, the price of spot gold has risen 67% in 2025. The question of its future, the Wall Street consensus says, is not if it will continue climbing in 2026, but by how much. Morgan Stanley forecasts the lustrous metal touching $4,500 by the middle of the year, and JPMorgan is slightly more bullish at $4,600. Goldman Sachs says it may finish 2026 around $4,900, and JPMorgan expects $5,000.

That’s because the factors that have supported gold’s rally have stuck around: There are still geopolitical tensions involving Ukraine and the Middle East, US deficit concerns, a weaker dollar and uncertainty about Federal Reserve policy. Most importantly, central banks are diversifying their reserves away from dollar-denominated assets, creating a crucial floor for demand. In a survey of central banks released by the World Gold Council in June, 95% of respondents said they planned to boost their gold holdings in the next year, while 73% predicted moderate or significantly lower US dollar holdings in global reserves over the next five years.

Not all the analysis is this rosy. See the Bank for International Settlements, the global monetary corporation owned by 63 central banks, including the Federal Reserve:

• A BIS analysis published earlier this month found that 2025 has marked the first time in 50 years that gold and the S&P 500 have exhibited “explosive behaviour” — or rapid, accelerating growth — at the same time. Coupled with concerns about the sustainability of the stock market’s AI-driven rise, the bank cautioned that a double bubble could form.
• BIS researchers found evidence that “retail investor exuberance and appetite for seemingly easy capital gains have spilled over” to gold, whose exchange-traded funds have traded at a premium relative to their net asset value since the start of 2025.

Bullion Bulls: In addition to retail investors who see a smelting-hot opportunity, gold’s rally has been supported by institutional investors who see it as a traditional safe haven. Both have poured into gold-backed ETFs: ETF investors added 222 tons of gold in the third quarter, the largest inflow in years, according to the Gold Council.