Gold bull market endures early 2026 volatility

Gold’s volatile start to 2026

Gold had a phenomenal, albeit volatile, start to the year. Rising geopolitical tensions around the world, in particular, developments involving Venezuela, Iran and Greenland, combined with persistent US tariff and sanctions threats, pushed gold above US$5,000 per ounce on 26 January. Breaking through that psychological level appeared to unleash a wave of speculative buying. By 29 January, gold was trading at an intraday high of US$5,595 per ounce, nearly US$1,300 higher than at the end of 2025.
That kind of price action made a pullback almost inevitable, and markets quickly found a catalyst in the nomination of Kevin Warsh as the next Fed Chair on 30 January. Gold fell 9% on the day. Warsh was initially seen as a more hawkish choice, supportive of the US dollar and generally negative for gold, signalling potentially less accommodative monetary policy ahead. That said, after the initial reaction, the implied probability of Fed rate cuts ticked up slightly, possibly reflecting Warsh’s comments suggesting alignment with President Trump’s preference for lower rates. Gold closed 30 January at US$4,894.23 per ounce, ending the month up US$574.86, or 13.31%.

Chart 1: 3 Month Gold Price

Source: FactSet. Data as of January 4, 2026. Past performance is not a guarantee of future results.

Key gold price drivers remain in place

January’s price action is a reminder of both gold’s uncontested role as a safe haven and US dollar alternative, and the increased volatility that comes with trading at record levels. In our view, these sharp swings should not distract or deter gold investors. Gold’s longer-term outlook remains supported by the same forces that drove it in 2025: central banks and investors seeking protection, diversification and de-dollarisation in their reserves and portfolios. Rising geopolitical risks and trade tensions, inflation concerns, a potentially weaker dollar and the risk of a meaningful correction in stretched equity markets should all continue to support gold in 2026. While new highs are likely to be followed by pullbacks and periods of range-bound trading, we believe this gold bull market still has several years to run.
The World Gold Council published its 2025 Gold Demand Trends: Total gold demand in 2025 exceeded 5,000 tonnes for the first time, a value of US$555 billion, which represented a 45% increase year-on-year. Stronger investment flows fuelled overall demand growth, with global gold bullion ETF holdings rising by 801 tonnes, the second-largest annual increase on record, while bar and coin demand accelerated to a 12-year high. Central banks purchased 863 tonnes of gold. Although official sector buying eased in 2025, from the recent pace of around 1,000 tonnes annually, it remains historically high and broadly diversified across regions.

Gold squities still in catch-up mode

Gold equity markets had little time to absorb the sharp rise in gold prices during the first month of 2026. The NYSE Arca Gold Miners Index delivered a strong gain of 6.92% over the month, but still underperformed the metal itself. This dynamic highlights a feature of the sector over the past decade: gold mining equities have been consistently valued using gold price assumptions that lag the spot price.
In recent years, as markets begin to gain confidence that higher gold prices are sustainable and adjust valuation assumptions accordingly, the gold price itself often continues to move higher, leaving equities in a persistent catch-up mode. This year, however, we are seeing a notable shift. Equity and commodity analysts are increasingly publishing gold price forecasts that not only point to higher prices in 2026 but also assume sustained or elevated price levels through 2028–2029. This should translate into stronger consensus expectations for valuations, earnings and cash flows across the sector and help support a long-overdue re-rating of gold mining equities.
Outlook for gold mining companies
Looking ahead, most gold mining companies will report their Q4 2025 and full-year results, along with 2026 guidance, in February. While outcomes will likely vary based on company-specific factors, particularly with respect to cost increases expected in 2026, we expect a clear and consistent message to emerge. Even at lower gold prices, gold miners are generating record cash flows with robust margins, enabling increased shareholder returns and accelerating investment in the sector’s long-term growth pipeline.

Key risks

An investment in our gold miners ETF carries risks associated with: ASX trading time differences, financial markets generally, individual company management, industry sectors, foreign currency, country or sector concentration, political, regulatory and tax risks, fund operations and tracking an index. See the VanEck Gold Miners ETF PDS and TMD for more details.
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