Gold’s correction has brought prices much closer to the levels implied by our model, creating a more attractive starting point for a recovery. Falling bond yields and a softer US dollar have begun to ease macroeconomic pressure, while stronger central-bank purchases and renewed inflows into gold exchange-traded products provide additional support. The US election may reinforce some of these trends, but the outlook depends more on inflation, interest rates and sustained demand than on the political result alone.

A more attractive starting point

Gold has moved from trading substantially above the level implied by our model earlier in 2026 to slightly below it today. Prices slipped beneath the psychologically important US$4,000/oz level at the end of October. Despite the subsequent post-election rebound, gold remains slightly below our model estimate.

This does not necessarily indicate a mispricing: our model captures selected macroeconomic drivers, while other influences can sustain deviations. Nevertheless, the earlier valuation headwind has diminished.

Falling bond yields and a modest softening in the US dollar have supported gold. Both trends began before the election, suggesting that the result has reinforced an existing move.

Figure 1: Gold Price Attribution

Source: Bloomberg, WisdomTree price model, data as of November 2026. The fitted gold price is the price the model would have forecast. The constant does not have economic meaning but is used in econometric modelling to capture other terms. It can be thought of as how much gold prices would change if all other variables are set to zero (although that would be unrealistic).
Historical performance is not an indication of future performance and any investments may go down in value.

Easing pressure from bond markets

Between August and the early-October peak in bond yields, gold showed relative resilience as bond prices fell and bond volatility rose sharply, particularly in September. The subsequent bond rally reduced that divergence. Further declines in yields, particularly real yields, could provide additional support for gold.

Several forces contributed to the earlier rise in yields and volatility:

• Persistent energy inflation and resilient growth led markets to price further central-bank tightening.
• Greater uncertainty over inflation and the interest-rate outlook increased volatility and the compensation investors required to hold longer-dated debt—the term premium.
• Mortgage-related hedging amplified the sell-off, while quarter-end portfolio adjustments may have added pressure.
• Fiscal vulnerabilities and substantial public- and private-sector financing needs remained underlying concerns.

The expansion of investment in artificial intelligence adds to demand for capital and could put upward pressure on real interest rates. However, evidence that AI-related bond issuance directly crowded out US government debt remains limited.

Figure 2: Gold vs real rates (Treasury Inflation-Protected Securities yield)

Source: WisdomTree. Bloomberg Finance LP. February 2026 – October 2026. Historical performance is not an indication of future performance, and any investments may go down in value.

What can the election change?

Renewed hopes for US–Iran diplomacy have contributed to lower oil prices. If sustained, an easing in energy costs could reduce inflation concerns and expectations for further interest-rate increases. Diplomatic progress remains uncertain, however, and renewed disruption to energy supplies could reverse that relief.

Markets continue to anticipate further Federal Reserve tightening, with a December increase widely expected. For gold, the more important question is whether the expected path of rates beyond that meeting becomes less restrictive.

The fiscal implications of the election are less clear. Divided government could constrain some new initiatives, but it could also create opportunities for spending agreements. The Trump administration favours higher defence spending, while Congressional Democrats may seek additional domestic funding, including for food assistance and the renewal of Affordable Care Act subsidies. Budget negotiations and debt-ceiling deadlines could provide opportunities for a deal.

Any agreement that increases spending without offsetting tax rises or savings would widen the deficit. Even without a deal, the One Big Beautiful Bill Act remains law and will continue to shape the fiscal outlook. The election therefore offers no clear assurance of fiscal restraint: substantial deficits and refinancing requirements will persist, with the prospect of larger Treasury coupon auctions adding to the supply that investors must absorb.

Further yield declines may consequently depend more on weaker growth, lower oil prices and reduced expectations for Fed tightening than on an improvement in fiscal sustainability. For gold, falling real yields would be particularly supportive, while persistent debt vulnerabilities reinforce its relevance as a hedge against extreme outcomes.

Mapping the recovery

Our recently published Gold Outlook to Q3 2027 indicates that gold could reach US$4,789/oz if the consensus economic forecasts underpinning our model materialise.

Some of the anticipated decline in bond yields and softening in the dollar has already occurred since publication. Part of the expected adjustment is therefore already behind us, although the forecast continues to indicate scope for a recovery.

Technical analysis offers potential milestones along that path. Gold appears to have found support around its recent lows. Using the high and low shown in the accompanying chart, the 23.6% Fibonacci retracement lies around US$4,220/oz, followed by the 38.2% level at approximately US$4,433/oz.

The 50% retracement lies around US$4,605/oz. Although not mathematically derived from the Fibonacci sequence, this level is commonly included in retracement analysis. We regard it as a plausible intermediate milestone over the coming year. These levels identify potential areas of resistance rather than guarantee a particular price path.

Figure 3: Gold price with Fibonacci Retracement Lines

Source: WisdomTree, Bloomberg. 9 November 2025 – 9 November 2026. Fibonacci retracement is a technical analysis tool used to identify potential support and resistance levels on price charts. It uses horizontal lines drawn at key Fibonacci ratios (23.6%, 38.2%, 61.8%, and 76.4%) after identifying a significant price swing. These levels are believed to be areas where price may stall or reverse direction. Labels on the chart represent the gold price of the support levels. Legend indicates the standard Fibonacci ratios. Historical performance is not an indication of future performance and any investments may go down in value.

Central banks reinforce demand

Central-bank demand strengthened markedly in the third quarter. World Gold Council estimates put net purchases at 321 tonnes, taking buying over the first nine months of 2026 to 675 tonnes—6% above the same period in 2025.

Strong purchases in Q2 and Q3 more than offset a subdued start to the year. Lower prices and reduced volatility may have supported buying at the margin, but the persistence of demand at historically elevated prices points to the continuing importance of reserve diversification and risk management.

These figures include estimates of unreported activity, so disclosed country-level purchases capture only part of the picture. Nevertheless, the broader pattern indicates that central banks remain an important source of demand.

Figure 4: Central Bank demand for gold (tonnes)

Source: WisdomTree, World Gold Council, Q1 2010 to Q3 2026. Historical performance is not an indication of future performance and any investments may go down in value.

Figure 5: Central Bank demand for gold (billion dollars)

Source: WisdomTree, World Gold Council, Q1 2010 to Q3 2026. Historical performance is not an indication of future performance and any investments may go down in value.

Investors return, consumers remain cautious

Demand for physically backed gold exchange-traded products also recovered strongly. Following outflows of 47.3 tonnes in Q2, these products attracted 211.2 tonnes in Q3—the strongest quarterly inflow since Q3 2025.

We view this as evidence of renewed investor interest in gold, even as futures positioning remains relatively muted. Concerns over inflation, fiscal sustainability and financial-market volatility have helped sustain gold’s appeal despite the opportunity cost associated with higher interest rates.

Retail demand was more mixed. Bar-and-coin buying fell 19% year-on-year in Q3, although demand over the first nine months remained the strongest since 2013. Jewellery demand fell 17% year-on-year in Q3 as high prices continued to constrain purchasing volumes. The contrast highlights the strength of strategic and investment demand alongside more price-sensitive consumer buying.

A constructive outlook, with conditions

Gold enters the final weeks of 2026 on a firmer foundation. Prices are slightly below the level implied by our model, central-bank buying remains strong and investment demand has recovered.

A sustained decline in real yields and further dollar weakness would strengthen the case for higher prices, although some of that adjustment has already occurred. Our consensus-based projection of US$4,789/oz by Q3 2027 remains constructive, with US$4,605/oz a plausible intermediate milestone.

Persistent inflation and renewed monetary tightening remain the principal risks to that recovery. The election may help ease some headwinds, but the more durable case for gold rests on its improved valuation, sustained demand and role in portfolios facing continued economic and geopolitical uncertainty.