ASX gold shares are higher on Tuesday, with the S&P/ASX All Ords Gold Index (ASX: XGD) up 1% at the time of writing.
The gold price is continuing its recovery from the recent commodities rout, trading near a one-week high of $5,048 per ounce.
The gold price ripped to a record US$5,608 per ounce on 27 January.
A major sell-off began two days later on news of a hawkish Fed chair nominee, which sparked profit-taking in the metals markets.
The gold price rose by 27% in 2024 and 65% last year.
In 2026 so far, the yellow metal is still up by an impressive 16.7% despite the sell-off.
Image source: Getty Images
What's next for the gold price?
The most ambitious prediction for the gold price this year comes from Julia Du of Industrial and Commercial Bank of China (ICBC).
ICBC is a partially state-owned multinational bank and the largest in the world by total asset value at $6.6 trillion, according to S&P Global.
Du says the gold price could crack the US$7,000 per ounce mark this year.
I expect 2026 to be a year of heightened geopolitical risk and strong safe-haven demand, allowing gold to continue the volatile yet upward trend.
Central banks are likely to keep adding to reserves, institutional investors will increase portfolio allocations, and retail demand – especially in Latin America – should remain robust.
Combined with continued Fed rate cuts, these forces support a bullish bias.
Temporary easing of tensions could trigger price pullbacks, but strong buying interest should limit downside.
Du is the most optimistic among scores of experts whose forecasts feature in the 2026 LBMA Annual Precious Metals Forecast Survey.
She predicts a peak of US$7,150 per ounce in 2026 and a low of US$4,100 per ounce during brief corrections, like the one we just saw.
Du is not alone in seeing potential for the gold price to rise through US$7,000 per ounce.
UBS also sees potential for the gold price to ascend beyond US$7,000 per ounce under the right circumstances.
In a note, UBS strategists Wayne Gordon and Giovanni Staunovo say the gold price could trade as high as US$7,200 per ounce and as low as US$4,600 per ounce in 2026.
… we now project an upside scenario target of USD 7,200/oz and a downside scenario of USD 4,600/oz (this is close to a one standard deviation move).
A hawkish pivot by the Federal Reserve could heighten risks to the downside, while a steep escalation in geopolitical tensions could bring us closer to the upside scenario.
Gold continues to be rated as Attractive, and we maintain a long position in our global asset allocation.
3 drivers for the gold price in 2026
Du says the three primary drivers of the gold price this year start with continuing central bank purchases to counter geopolitical risks.
Although prices are high, these purchases are strategic and relatively insensitive to price fluctuations.
The second driver will be institutional allocations, with Du commenting:
Last year's sharp gold rally highlighted its growth potential beyond safe-haven status.
With U.S. equities facing possible downturns, institutions are likely to boost gold allocations in their portfolios.
The third driver will be demand for physical gold amid social unrest in some parts of the world.
Social instability drives consumers to seek physical gold, especially in regions with severe currency depreciation and escalating conflicts such as Latin America.
Similar trends are emerging globally as more consumers recognise gold's investment value.
Record amounts flowing into gold ETFs
Across the global markets, gold ETFs received a record net inflow of US$19 billion (A$27.3 billion) last month.
According to the World Gold Council, gold ETFs now have a record US$669 billion in assets under management (AUM).
ASX gold ETFs attracted a net inflow of US$202 million in January, bringing local AUM to US$8.6 billion.
In 2025, Betashares Global Gold Miners Currency Hedged ETF (ASX: MNRS) was the highest returning ASX ETF holding overseas shares.
The MNRS ETF gave a total return, including dividends, of 149% last year.
The second-best performer was VanEck Gold Miners ETF (ASX: GDX), which returned 144%.
The market's largest physical gold ETF, Global X Physical Gold (ASX: GOLD), returned 54% in 2025.
