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Gold still among best-performing assets; prices may rally again: New report
The World Gold Council said the first half of 2026 highlighted gold's continued appeal during periods of heightened geopolitical uncertainty
- PUBLISHED: Thu 2 Jul 2026, 6:00 AM
Despite retreating from record highs earlier this year, gold remained one of the world's best-performing assets over the past 12 months, according to the World Gold Council’s mid-year gold outlook report.
The precious metal has outperformed most major asset classes over the past year, including global and US bonds, cash, balanced portfolios, US equities, developed market stocks outside the US and commodities, with only emerging market equities delivering stronger returns, according to the council.
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Gold is down around 7 per cent year-to-date after surging to an all-time intraday high of more than $5,500 an ounce in January before falling back to around $4,000 by late June. Despite the correction, the report said gold has continued to outperform many major asset classes, with other investments still catching up.
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The World Gold Council said the first half of 2026 highlighted gold's continued appeal during periods of heightened geopolitical uncertainty and sharp swings in investor sentiment. It also underscored the growing influence of Asian markets in global gold price discovery.
At current levels, the council believes gold prices broadly reflect the global economic backdrop of moderate growth, easing but still elevated inflation, and expectations that central banks will continue tightening monetary policy at a measured pace.
Under those conditions, gold is expected to trade within a relatively narrow range of around 5 per cent above or below current levels during the second half of the year.
What could drive gold higher?
However, the report said several factors could trigger another rally. A deterioration in economic conditions, renewed geopolitical tensions, lower interest rate expectations or a fresh wave of investor buying could lift gold back towards $4,500 an ounce. Stronger catalysts could potentially drive prices even higher.
On the downside, resilient economic growth, higher bond yields and calmer financial markets could place further pressure on prices. Even then, the council expects bargain-hunting demand to limit declines of more than 10 to 15 per cent from current levels.
The report attributed much of gold's performance this year to elevated geopolitical risks and changing investor sentiment. Momentum trading, investor positioning and profit-taking also played an important role, while shifting expectations for interest rates and the US dollar created mixed effects on prices.
Although gold's volatility climbed above 50 per cent during the escalation of the US-Iran conflict, it has since eased to below 30 per cent. Even so, volatility remains well above its long-term average of 17 per cent.
Gold to remain a source for support
Looking ahead, the Council said central bank purchases of gold are expected to remain an important source of support. Policy changes in major consumer markets such as India could also influence demand and shape price movements during the second half of the year.
It added that while gold did not respond as expected during the recent Middle East tensions, the circumstances surrounding that period were unusual and should not be viewed as representative of gold's typical behaviour during geopolitical crises.
It also noted that persistently high inflation could provide additional support for gold over time, as investors increasingly seek assets that can preserve purchasing power during prolonged periods of rising prices.
Hind Aldah is a business reporter based in Sharjah. In her spare time, you will find her playing classical guitar, painting amateur oil paintings, or crocheting the same old scarf that leads nowhere.