The course of gold prices in global markets and future expectations
Despite rising bond yields, gold staying above $4,000 per ounce highlights the shift in investor risk perception and geopolitical concerns.
Although gold prices are affected by interest rate hikes and the direction of the dollar, traditional market rules are weakening. The fact that gold holds above $4,000 despite rising bond yields shows that increasing public debts and geopolitical risks have changed investor preferences.
Weakening of traditional rules
While the course of gold continues to be influenced by interest rate hikes and the direction of the dollar, traditional market rules have begun to operate less and less. Normally, rising bond yields decrease the appeal of non-interest-bearing gold, yet the precious metal remaining above $4,000 reveals the change in risk perception.
Approaches of central banks
Bank of Italy Deputy Governor Sergio Nicoletti Altimari stated that gold's safe-haven role gains importance during periods of increasing geopolitical risks and economic fragmentation concerns. Meanwhile, Bundesbank President Joachim Nagel emphasized that credit risk stemming from high debt levels makes portfolio diversification with gold important.
Central bank purchases and demand
The resilience in gold is closely linked to the transformation in the demand structure, and according to Metals Focus data, central bank gold purchases are expected to decrease by 15 percent year-on-year in 2026 to 720 tonnes. Nevertheless, purchases are projected to remain above pre-2022 levels.
Price expectations for 2027
Metals Focus states that the persistence of inflation, the growing US budget deficits, and policy uncertainty will steer investors toward alternative assets. The consultancy firm expects gold to remain above current levels and reach an average of $5,330 per ounce in 2027.
Pension funds' preferences for gold
Pension funds in the Netherlands, the US, the UK, and Australia examined by the World Gold Council maintain their gold positions in the range of 2 percent to 5 percent. For example, Pensioenfonds PDN in the Netherlands increased its gold share to 5 percent, while other funds also preserved this ratio in their portfolios.
New derivatives move in London
Intercontinental Exchange, the owner of the New York Stock Exchange, officially launched the trading of precious metal derivatives in London, the world's most important physical gold and bullion center. This move provides a new source of liquidity for institutions and funds trading gold and silver.