After one of the most explosive upward trends in modern market history, few investors expect gold to repeat the same performance in 2026. However, many top money managers are still betting on continued gains, arguing that the factors that drove the precious metal to record highs are still in place.
Gold surged 65% in 2025—its strongest performance in nearly half a century—as retail and institutional investors, along with central banks, flocked to the precious metal. In a year where almost every factor seemed to favor gold, from falling interest rates to geopolitical tensions, it even broke through an inflation-adjusted record high that had stood since 1980.
Bloomberg spoke to more than a dozen money managers, whose firms collectively manage trillions of dollars in assets, to gauge the direction after this historic year. Most said they preferred not to significantly reduce their positions, maintaining their belief in gold's long-term appeal.
We still expect gold to rise in 2026, as the factors that fueled its strong rally remain in place, according to Ian Samson, portfolio manager at Fidelity International. He added that he reduced some of his positions during the frenzied rally in October but later increased them, citing central bank purchases, low interest rates, and high fiscal deficits as supporting factors.
Shaking confidence in major currencies
Other investors pointed to declining confidence in the major currencies of advanced economies—resulting from pressures on central bank independence and rising government debt—as a key pillar of support for gold. Soaring public debt has fueled political infighting throughout the year, from the standoff with the US Congress to the political gridlock in France and scrutiny of Japan’s record budget under its new leadership.
Mike Wilson, chief investment strategist at Morgan Stanley, said: “Gold has essentially become a bet against fiat currencies more than anything else.” This view gained traction during the final months of 2025, with the so-called “debasement trade” as prominent investors like Ken Griffin and Ray Dalio viewed gold’s rising price as a warning sign.
Wilson recommends allocating 20% of portfolios to real assets, including gold, as a hedge against inflation, instead of the traditional 40/60 split between stocks and bonds, to become 20/20/60. He said the narrative of currency devaluation has become mainstream.
He added: When everyone understands this story, you have to ask yourself: Has it been fully priced in? I don't think so. Simply because I haven't seen a change in behavior yet. I don't see financial discipline anywhere in the world. Quite the opposite.
Gold expected to rise slightly by year's end
Darwy Kong, head of commodities and portfolio manager at DWS Group, said his firm maintains a slightly larger-than-usual allocation to gold-related investments and expects to maintain this trend in 2026.
Kong believes prices will rise slightly by the end of the year, but he also anticipates short-term trading opportunities as a result of gold fluctuating with the volatility of broader markets.
Massimiliano Castelli of UBS Asset Management said that pension and insurance funds showed increasing interest in gold during 2025, as some entities that had not previously invested in it began allocating about 5% of their portfolios to it, attracted by the strong returns and gold's ability to hedge against risks in other parts of the portfolios.
He added: Of course, we don't expect the same upward potential we saw last year, when gold was the best asset class ever. But we remain optimistic.
Historical warning signs regarding gold's performance
However, history offers a warning: massive upward surges are often followed by prolonged periods of weakness. Gold reached a record high of $1,921 an ounce in 2011, but it took nine years to recover. Similarly, its 127% surge in 1979 was followed by a prolonged bear market.
Despite this, gold remains underrepresented by American investors. According to a Goldman Sachs analysis published in December, gold exchange-traded funds (ETFs) represent only 0.17% of individual portfolios in the United States—six basis points lower than their 2012 peak. Goldman estimates that every 0.01% increase in this share drives the price of gold up by 1.4%.
Central bank purchases are a major driver for the yellow metal.
Central bank purchases are expected to remain the biggest driver of higher prices, with Goldman Sachs forecasting an average purchase rate of 80 tons per month through 2026. Central bank purchases have jumped since 2022 following the freezing of Russian reserves, which has increased the appeal of gold as an asset that cannot be confiscated.
Thomas Rodrik, portfolio manager at hedge fund Trium Capital, said gold is one of the few assets that allows investors to build liquid wealth outside the sphere of US influence. He explained that although he has reduced his positions slightly since October, he still maintains a healthy level of risk in gold.
Roderick believes that China's accumulation of gold, in particular, lies at the heart of his optimistic outlook, given Beijing's desire to invest the proceeds from its massive trade surpluses in assets protected from American interference. He stated that China would not say, Gold is expensive, let's buy more US bonds—that would not align with its geopolitical logic.
Central banks rarely sell their holdings, making their demand a stable source of price support. But while monetary institutions may have sparked the rise in gold prices, rapid inflows from institutional and individual investors in the second half of last year played a major role in fueling the surge.
According to Chanel Ramji of Pictet Asset Management, the more gold owned by speculative investors, the higher its correlation with other high-risk assets.
However, Ramji currently maintains a substantial 8% allocation to gold, having reduced his positions during the surge in speculative activity in October, then increased them again in December as more quick money exited the market.
He said: Under these circumstances, where most purchases are coming from major central banks, we feel increasingly comfortable maintaining a higher gold weight in portfolios. He added: We expect gold to move upwards this year, but at a more cautious and steady pace.
