Gold is expected to remain resilient in the second half of 2026 despite a recent sharp pullback from record highs, with the World Gold Council saying geopolitical risks, central bank demand and changing monetary policy expectations could trigger another rally, Mining Zimbabwe can report.
By Ryan Chigoche
In its latest Gold Mid-Year Outlook, the World Gold Council said the precious metal is likely to trade within a relatively narrow range around current levels under its base-case scenario of moderate global economic growth, easing but still elevated inflation, and limited further central bank tightening.
However, it said the market is well-positioned for a breakout should economic or geopolitical conditions deteriorate.
“A worsening economy or renewed geopolitical shock, a shift towards lower interest-rate expectations, or a wave of dip-buying could reignite gold’s momentum and lift it back towards US$4,500/oz or above,” the report said.
The outlook follows a turbulent first half of the year in which gold fell about 7% year to date, after surging to an all-time intraday high above US$5,500 per ounce in January before retreating below US$4,000 per ounce in late June.
According to the council, the correction reflects shifting investor sentiment after an exceptionally strong rally rather than a fundamental weakening of the market.
Despite the decline, gold remains among the world’s best-performing assets over the past 12 months, underscoring continued investor demand during periods of heightened uncertainty.
The World Gold Council said elevated geopolitical tensions and market volatility were the primary drivers behind gold’s gains earlier this year, while momentum-driven trading, profit-taking and changing expectations for interest rates contributed to the subsequent correction.
The report cautioned that a stronger global economy, rising bond yields and calmer financial markets could push prices lower in the months ahead. However, it expects any decline of more than 10% from current levels to be limited, as lower prices are likely to attract bargain hunters back into the market.
Another key support for bullion is expected to come from central banks, which have emerged as one of the strongest sources of demand in recent years.
Although some monetary authorities reduced or swapped portions of their gold holdings during the first quarter, the World Gold Council expects central banks to remain net buyers throughout 2026.
Its latest survey also found that a growing number of reserve managers intend to increase their gold holdings over the next year, signalling continued confidence in the metal as a strategic reserve asset.
The council estimates that purchases of an additional 20 to 30 tonnes above the long-term annual average of around 600 tonnes could increase gold prices by roughly 1%, while also boosting investor confidence through the positive signal such buying sends to the market.
For Zimbabwe, where gold remains the country’s largest export earner, the outlook suggests that although prices may remain volatile in the near term, the underlying fundamentals supporting the precious metal remain intact, offering continued support for the country’s gold mining industry.
