Gold Market Analysis: Potential for $6,000 Per Ounce as it Enters ‘Structural Repricing Phase’
Gold’s long-term prospects are looking increasingly positive, according to a recent report from Motilal Oswal Financial Services Ltd (MOFSL). The report highlights that gold prices are expected to surpass the $5,000 per ounce mark by early 2026, driven by factors such as global de-dollarization, rising fiscal stress, and escalating geopolitical tensions. MOFSL describes this trend as a “structural repricing phase,” indicating the onset of a new supercycle for gold rather than a mere short-term rally.
Price Projections and Market Dynamics
MOFSL forecasts that Comex gold prices will reach approximately $6,000 per ounce within the next year, translating to around Rs 1.85 lakh per 10 grams in the domestic market. The brokerage also anticipates that prices could climb to $7,500 per ounce in the medium term if geopolitical and fiscal pressures continue to escalate. Navneet Damani, head of research for commodities at MOFSL, emphasized that the long-term outlook for gold remains robust. He noted that as global reserves increasingly diversify away from dollar-centric assets and physical supply remains constrained, gold prices are likely to remain supported around and above the $5,000 mark. This current cycle is influenced not only by inflation but also by a growing lack of confidence in fiscal and monetary systems.
Gold’s Resilience Amid Positive Real Rates
The report also points out that gold prices have continued to rise even during periods of positive real interest rates from 2023 to 2025, a time when prices typically decline. This unusual trend suggests that investors are becoming increasingly concerned about soaring global debt levels and the long-term viability of fiscal and monetary frameworks. Manav Modi, a commodities analyst at MOFSL, remarked that gold’s strength in the face of positive real interest rates indicates a significant shift in investor sentiment. He explained that real returns are now perceived as temporary and policy-driven, which diminishes the cost of holding gold and enhances its appeal as a safeguard against broader financial risks.
Geopolitical Tensions and Supply Constraints
The report highlights that rising geopolitical tensions in regions such as Eastern Europe, the Middle East, and Asia, along with renewed trade disputes and tariff-related disruptions, have contributed to increased inflation and currency volatility. These factors make gold a more attractive option as a neutral and reliable asset. Damani noted that as fiscal stress rises and questions about monetary independence emerge, gold’s role as non-sovereign money has gained significance, leading to a structural shift in demand. Additionally, the report points to tight global physical supply conditions, including limited mine output, shrinking inventories across major exchanges, and rising production costs, which have all contributed to elevated precious metal prices.
Domestic Demand and Central Bank Activity
On the domestic front, the depreciation of the rupee and strong retail demand have further bolstered gold prices. The report indicates that exchange-traded funds (ETFs) have experienced renewed inflows after a period of decline. Central banks have also remained consistent buyers, adding approximately 1,000 tonnes of gold annually for the past four years as part of their strategies to diversify reserves and reduce reliance on dollar-based assets. Overall, MOFSL expects gold to remain well-supported in the long term, driven by ongoing reserve diversification, constrained supply growth, and persistent global economic and geopolitical uncertainties.
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