March 13, 2026
Golden times! – and no end in sight
Anyone invested in precious metals has done extraordinarily well.
To the point!
Over the past year, the price of gold per troy ounce has doubled. Even in real terms – that is, adjusted for inflation – gold has never been this expensive (see fig. 1). It is therefore no surprise that I am often asked these days when these golden times will finally come to an end. Can it really go on forever? Well, forever certainly not – and not at the same blistering pace as in 2025. But we still see some upside potential for 2026.
Fig. 1: Nominal and in USD of 2025
1970–2026
⬤ {series.name}: {point.y}
What is driving the price of gold
In January 2026, the price of gold hit a new record of almost 5,600 USD. A sharp correction followed after U.S. president Trump floated Kevin Warsh as the next Fed chair. Clearly, the gold bulls had been betting on a candidate who would stand for a much looser monetary policy. As a non‑yielding asset, gold shines especially when interest rates are low.
What Trump apparently does not want or is not able to understand was obvious to markets at first glance: Warsh is not someone inclined to slash rates aggressively. He left the Fed in 2011 because – remarkably – he felt monetary policy was too loose.
More recently, it seemed that markets had moved past the Fed shock and that gold was about to resume its previous upward trend. Then the war in Iran broke out and generated new headwinds for gold. The fighting in the Middle East has pushed energy prices sharply higher, making higher inflation more likely and thereby reducing hopes of rate cuts in the U.S. At the same time, investors have once again fled into the world’s most liquid safe‑haven currency, which has driven a marked appreciation of the U.S. dollar. A stronger dollar makes gold more expensive for buyers outside the U.S. dollar zone and thus dampens demand for the metal.
Gold supply lags behind demand
Despite high prices, neither mine production nor recycling is rising significantly. While supply remains broadly flat, investors in gold ETCs (exchange‑traded commodities that track the price of gold) continue to add to their positions (see fig. 2). Such investments are often driven by geopolitical and economic uncertainty. In addition, demand for coins and bars remains solid; it already shot up by 15% last year.
Fig. 2: Structure of gold demand
in tons
By contrast, central banks are holding back on gold purchases given the lofty price level. As much as central bankers would like to hedge against the vagaries of U.S. policy and reduce their dependence on the dollar – everything has its price. And that price is currently very high. This is also why jewelry demand has been weakening noticeably for some time now.
Tailwinds from the Fed and, yes, cryptocurrencies
I do not expect energy prices to remain permanently at today’s elevated levels. The price of gold should therefore benefit from further rate cuts in the U.S. We expect the Fed to trim its policy rate by a further half percentage point by mid‑2027. On top of that, the U.S. dollar is likely to resume its downward trajectory, which would be supportive for gold. LBBW Research forecasts an exchange rate of 1.24 USD/EUR for mid‑2027.
Support is also coming from a somewhat surprising source: cryptocurrencies have become an important driver of demand in the gold market. The term “digital gold” is acquiring a rather literal twist. The stablecoin Tether alone now has a market capitalization of around USD 180 billion and intends to invest its reserves increasingly in gold. It already ranks among the largest private holders of gold in the world.
Forecast Gold (USD/oz)
| Current | Q2/26 | Q4/26 | Q2/27 |
|---|---|---|---|
| 5.112 | 5.400 | 5.700 | 6.000 |
6,000 USD is in sight – but only by mid‑2027
The gold rally is likely to continue over the course of this year, albeit at a somewhat more moderate pace. The main arguments in favor are the ongoing buying by ETC investors and the still‑sluggish supply side in the gold market. Additional price support comes from the prospect of lower U.S. policy rates, the foreseeable further depreciation of the U.S. dollar, and steadily rising gold demand from cryptocurrencies. U.S. politics remains a source of uncertainty, as it will probably continue to throw up the occasional surprise for financial markets – which should keep gold in demand as a safe haven. For mid‑2027, we expect prices of 6,000 USD per troy ounce of gold. That may not match the rocket‑like gains of the recent past, but almost 20% in 18 months is perfectly respectable. All the same, the spectacular rally we have just witnessed is a reminder to remain cautious – even when it comes to gold.
Dr. Moritz Kraemer, Chief Economist / Head of Research at LBBW
Download To the point!
-
346.5 KB | March 13, 2026
This publication is addressed exclusively at recipients in the EU, Switzerland, Liechtenstein and the United Kingdom.
This report is not being distributed by LBBW to any person in the United States and LBBW does not intend to solicit any person in the United States.
LBBW is under the supervision of the European Central Bank (ECB), Sonnemannstraße 22, 60314 Frankfurt/Main (Germany) and the German Federal Financial Supervisory Authority (BaFin), Graurhein-dorfer Str. 108, 53117 Bonn (Germany) / Marie-Curie-Str. 24-28, 60439 Frankfurt/Main (Germany).
This publication is based on generally available sources which we are not able to verify but which we believe to be reliable. Nevertheless, we assume no liability for the accuracy and completeness of this publication. It conveys our non-binding opinion of the market and the products at the time of the editorial deadline, irrespective of any own holdings in these products. This publication does not replace individual advice. It serves only for informational purposes and should not be seen as an offer or request for a purchase or sale. For additional, more timely in-formation on concrete investment options and for indi-vidual investment advice, please contact your investment advisor.
We retain the right to change the opinions expressed herein at any time and without prior notice. More-over, we retain the right not to update this information or to stop such updates entirely without prior notice.
Past performance, simulations and forecasts shown or described in this publication do not constitute a reliable indicator of future performance.
The acceptance of provided research services by a securities services company can qualify as a benefit in supervisory law terms. In these cases LBBW assumes that the benefit is intended to improve the quality of the relevant service for the customer of the benefit recipient.
Additional Disclaimer for recipients in the United Kingdom:
Authorised and regulated by the European Central Bank (ECB), Sonnemannstraße 22, 60314 Frank-furt/Main (Germany) and the German Federal Financial Supervisory Authority (BaFin), Graurheindorfer Str. 108, 53117 Bonn (Germany) / Marie-Curie-Str. 24-28, 60439 Frankfurt/Main (Germany). Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request.
This publication is distributed by LBBW to professional clients and eligible counterparties only and not retail clients. For these purposes, a retail client means a person who is one (or more) of (i) a client as defined in point (7) of Article 2(1) of the UK version of Regulation (EU) 600/2014 which is part of UK law (UK MiFIR) by virtue of the European Union (Withdrawal) Act 2018 (EUWA) who is not a professional client (as defined in point (8) of Article 2(1) of UK MiFIR); or (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the FSMA) and any rules or regulations made under the FSMA (which were relied on immediately before the 31 December 2020 (IP completion day)) to implement Directive (EU) 2016/97 on insurance distribution, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of UK MiFIR; or (iii) not a qualified investor as defined in the UK version of Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, which is part of UK law by virtue of the EUWA (the UK Prospectus Regulation).
This publication has been prepared by LBBW for information purposes only. It reflects LBBW’s views and it does not offer an objective or independent outlook on the matters discussed. The publication and the views expressed herein do not constitute a personal recommendation or investment advice and should not be relied on to make an investment decision. The appropriateness of a particular investment or strategy will depend on an investor’s individual. You should make your own independent evaluation of the relevance and adequacy of the information contained in this publication and make such other investigations as you deem necessary, including obtaining independent financial advice, before partici-pating in any transaction in respect of the financial instruments referred to this publication herein.
Under no circumstance is the information contained within such publication to be used or considered as an offer to sell or a solicitation of an offer to buy any particular investment or security. Neither LBBW nor any of its subsidiary undertakings or affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, fullness, accuracy or completeness of the information in this publication (or whether any information has been omitted from the publication) or any other information relating to the, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this publication or its contents or otherwise arising in connection therewith.
The information, statements and opinions contained in this publication do not constitute or form part of a public offer. LBBW assumes no responsibility for any fact, recommendation, opinion or advice con-tained in any such publication and expressly disclaims any responsibility for any decisions or for the suitability of any security or transaction based on it. Any decisions that a professional client or eligible counterparty may make to buy, sell or hold a security based on such publication will be entirely their own and not in any way deemed to be endorsed or influenced by or attributed to LBBW.
LBBW does not provide investment, tax or legal advice. Prior to entering into any proposed transaction on the basis of the information contained in this publication, recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transac-tion.
