Gold set for stellar run as investors seek safe havens

Gold is poised to remain a cornerstone of investment portfolios in 2026, with analysts projecting the yellow metal to average $4,538 per ounce next year and bullish scenarios pointing towards $5,000 an ounce, underscoring its enduring appeal as a hedge against uncertainty and a key driver of returns.

- Issac John

A refiner stacks gold bullion after being removed from casts at the ABC Refinery smelter in Sydney. Retail interest in gold-backed exchange-traded funds (ETFs) has surged recently, with year-to-date inflows in 2025 reaching their highest levels since 2020.

(AFP FILE)

In a widely followed annual outlook, Michael Widmer, head of Metals Research at Bank of America (BofA), highlighted that tightening market conditions and persistent demand are positioning gold as a “hedge and alpha source” for investors navigating a complex macroeconomic backdrop. His firm’s forecast rests on a mix of supply constraints, rising production costs and robust earnings outlooks for the world’s leading gold miners.

Widmer’s projections reflect a cautious view on supply. He expects the 13 major North American gold producers to deliver 19.2 million ounces in 2026, a 2 per cent decline from 2025. He also anticipates total all-in sustaining costs—the industry’s broad measure of production expense—will climb 3 per cent to about $1,600 per ounce, slightly above consensus expectations, potentially eroding future supply growth.

At the same time, profitability among gold producers is expected to strengthen markedly. BofA forecasts total Ebitda (earnings before interest, tax, depreciation and amortisation) across the sector to rise 41 per cent to approximately $65 billion in 2026, a reflection of rising prices and operational leverage.