We are nearly four years into the current gold bull market. Yet despite that impressive lifespan…one during which gold has risen 200% and eclipsed the once-mythic $5,000-per-ounce mark…numerous credible strategists remain exceptionally enthusiastic about gold’s near-term prospects.
Among the metal’s biggest believers are analysts at the World Gold Council (WGC), who recently published a report detailing why, in their assessment, gold should continue to shine brightly through at least the end of 2026.
To be sure, one reason gold remains in very high regard is that the profound geopolitical tension which has generated a substantial risk premium on behalf of the metal is expected to remain intact. But in the opinion of WGC observers, there’s no shortage of other factors poised to support gold-price strength in the months ahead.
Apparent Strength of Global Markets Masks “Very Real Risks” to Equities
One of the more prominent potential drivers, they say, pertains to the lofty heights at which equity valuations now are sitting amid an especially precarious global environment:
“Risk assets are sitting at uneasy highs against a backdrop of a world in turmoil. Yes, there are a host of tailwinds that should support a revival in growth throughout the year, including easier monetary policy and the global fiscal boost. But the consensus narrative of a global economy that has proved ‘robust’ in the face of tariffs and turmoil underestimates the very real risks that remain.”
Helping to both underscore and exacerbate that risk is the mountain of margin debt to which investors have turned amid the climate of euphoria that has come to broadly characterize market activity.
“The likelihood of reaching breaking points in equity markets during 2026 is difficult to ascertain with any level of confidence,” the WGC report noted, “but for a hint as to the bumpy road ahead look no further than the surging US margin debt.”
FINRA Margin Debt Now at Record $1.3 Trillion
Look no further, indeed. FINRA (Financial Industry Regulatory Authority) margin debt currently sits at a record ≈$1.3 trillion and has grown 37% over the past year, significantly outpacing the 20% gain achieved by the S&P 500.
“While growth in margin debt does not necessarily signal an impending peak in the stock market, it is an indication of increasing financial speculation and growing risks to market stability,” the WGC warned.
Connecting the dots further, WGC analysts noted “it would only take a couple of missed earnings targets to puncture confidence. This, in turn, could result in an unwinding of investor leverage positions (potentially magnifying the downside risks to stock prices) and lead to greater safe-haven demand, notably gold.”
“In fact,” the council added, “with few exceptions, gold has been especially effective during such periods of systemic risk, generating positive returns and reducing overall portfolio losses.”
Continued Need to Blunt Inflation “Should Support Gold in the Medium Term”
Another compelling reason to believe gold’s impressive strength may persist, the WGC said, is the ongoing uncertainty about where inflation is headed and how continued price pressures might be handled by the Federal Reserve. Although down significantly from the highs (of this cycle) reached nearly four years ago, inflation remains remarkably sticky, as evidenced by the acceleration of both monthly and annual core wholesale inflation in January.
“If core inflation rises meaningfully the Fed will have to raise short-term rates again. In other words, the bond market is not out of the woods, and another cyclical upleg in developed market yields could be in the offing,” the WGC said. “And while a clear turn towards policy hawkishness could curb gold demand in the near term due to a higher opportunity cost, gold should be supported in the medium term via stronger inflation-hedging demand and a higher stock-bond correlation.”
Additionally supporting the WGC’s idea that inflation-energized gold buying could trump the negative impact on metals of tighter monetary policy is the way in which gold performed during 2022 and 2023…a period which saw the central bank raise interest rates at the fastest pace in 40 years. While financial markets were basically flat during those years, the supposedly higher-rate-averse gold climbed nearly 14%.
To be sure, it wasn’t just a greater belief in the potential damage that could be wrought by inflation which pushed gold higher amid an aggressive tightening campaign; it also was the persistent and energetic purchasing of gold by central banks as well as the multitude of risks posed by a big jump in geopolitical uncertainty.
WGC Analysts: “Need for Portfolio Resilience Has Rarely Been More Pressing”
But that’s the point, as well as the foundational basis for the WGC’s belief in gold’s continued viability; namely, that there continue to be various ongoing risks to the stability of the global order…and that as long as there are – and especially as long as gold remains significantly under-owned as a “long” strategic portfolio asset – the case for the metal remains nothing short of compelling.
“As investors navigate a landscape marked by stretched valuations, persistent macro risks, and rising pockets of financial excess, the need for resilience in portfolios has rarely been more pressing,” the WGC said in delivering its punchline, adding:
“In this environment, gold’s strategic role remains as relevant as ever. Its historical ability to provide diversification, mitigate drawdowns during periods of market stress, and perform even after strong run-ups, reinforces its value as a core, long-term portfolio component.”
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