Gold Prices likely to remain steady in 2026, India crucial influencer: World Gold Council
New Delhi, July 2: While Gold has retreated from its record highs earlier this year, it is likely to trade within a narrow range during the second half of 2026 unless fresh geopolitical or economic shocks emerge, according to the World Gold Council (WGC).
In its Mid-Year Outlook 2026, the WGC said it expects gold prices to remain broadly within ±5 per cent of current levels if macroeconomic conditions evolve as markets currently anticipate.
However, a deterioration in economic growth, renewed geopolitical tensions or a shift towards lower interest-rate expectations could propel prices back towards US$4,500 per ounce or higher.
The Yellow metal experienced one of its most volatile starts to a year, surging to record highs above US$5,500 per ounce in January amid heightened geopolitical tensions before falling below US$4,000 per ounce late last month.
Despite the correction, gold remains among the best-performing major asset classes over the past year.
The report attributes much of the price movement to elevated geopolitical risks, investor positioning and changing expectations around interest rates and the US dollar.
Risk and uncertainty, foreign exchange movements and momentum together accounted for more than 70 per cent of gold’s price variability during the first half of 2026.
India A Critical Market
The report identifies India as one of the most influential markets for global gold demand.
As the world’s second-largest gold market, India consumes around 800 tonnes of gold annually.
However, recent policy measures, including an increase in import duty from 6 per cent to 15 per cent, are expected to reduce jewellery, bar and coin demand by 50–60 tonnes, or roughly 10 per cent year-on-year.
The WGC also cautions that a slowdown in India’s economy could weaken consumer demand, while rising defaults on gold-backed loans could increase recycled gold supply and weigh on prices.
Key Factors For Gold Prices
According to the WGC, three factors could reignite gold’s rally: worsening geopolitical or economic conditions, a reversal in interest-rate expectations and increased participation from long-term investors.
The report notes that geopolitical risks continue to play a significant role in supporting gold prices.
Historically, a 100-point monthly increase in the Geopolitical Risk (GPR) Index has lifted gold prices by around 2.5 per cent.
Conversely, stronger-than-expected economic growth, rising bond yields, a firmer US dollar and improving investor appetite for risk assets could place downward pressure on bullion.
Even then, any decline beyond 10-15 percent would likely attract bargain buying, limiting further losses, the WGC believes.
Outlook For H2 2026
The World Gold Council concludes that while gold is unlikely to experience a sustained breakout without a fresh catalyst, its long-term investment case remains intact.
Persistent geopolitical uncertainty, central bank accumulation and long-term institutional demand continue to provide structural support.
At the same time, investors will closely monitor interest-rate decisions, inflation trends and developments in major economies to gauge whether gold breaks out of its expected trading range during the remainder of 2026. (BVI)
