The gold outlook for the first quarter (Q1) of 2026 is quite optimistic, with a high potential for setting new all-time highs. Geopolitical tensions and the Federal Reserve’s (Fed) dovish rhetoric will underpin prices next year. However, there are other fundamental factors to take into account.
US monetary policy path. If the regulator cuts rates in February 2026, as widely expected, gold quotes could get a significant boost. When borrowing costs are lower, bond returns fall, favoring a non-yielding precious metal. The latter often garners the attention of major funds.
Inflation expectations. The fact that the US Consumer Price Index (CPI) slowed down to 2.3% does not alleviate investor concerns. They consider another burst of inflation possible due to the mounting budget deficit and unstable energy prices. Under these circumstances, gold often acts as a key safe-haven asset.
Dedollarization trend. BRICS+ members are anticipated to keep seeking alternatives to the greenback. The most obvious one is gold. Thus, central banks of China, India, and Turkey are likely to continue increasing their reserves of the precious metal.
Seasonal demand. The first quarter is usually a prosperous period for bullion. Chinese New Year, which will take place on January 29, 2026, is likely to be a strong catalyst. Its consumption in Asia reaches a peak, as people eagerly buy gold jewelry and other gifts up to the last penny. So, in late January and February, prices will receive a solid support.
During this period, gold will be the best asset to hedge portfolios against high stock market volatility and the start of policy easing by global central banks.
From a technical standpoint, bullion prices have recently reached a new record high and are now trading in overbought territory. Therefore, a slight correction is probable. Consider buying the asset from the $4,380 level.
The overall recommendation is to buy gold from $4,380. Profits should be taken at $4,500. Stop Loss could be set at $4,280.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
