In January 2026, gold posted its largest monthly gain since September 1999, before recording its sharpest monthly decline since June 2013 in March 2026. The first quarter of 2026 has therefore been exceptionally eventful for the metal.
We believe gold is in the process of transitioning towards a new, higher steady state, driven by a broadening investor base. Chinese insurance companies, Indian pension funds, and digital asset issuers such as Tether represent relatively new sources of demand. At the same time, gold exchange-traded fund (ETF) inflows in both China and India have increased significantly over the past year.
The process of establishing this new equilibrium is likely to remain volatile. However, it also suggests that gold prices may ultimately settle at a higher level. For long-term investors, periods of volatility may therefore present opportunities rather than risks.
Against this backdrop, modelling gold prices is particularly challenging. We therefore treat forecasts derived from our traditional framework as a baseline, with potential upside driven by structural shifts in demand, alongside an expectation of elevated volatility.
