Gold prices were higher in early European trading on Monday, recovering some ground after a steep drop last week from record highs above $4,300 an ounce. The rebound came as HSBC (HSBC) predicts that the precious metal will hit $5,000 next year.
Gold futures rose 1.3% to $4,270 per ounce at the time of writing, while spot gold rose by 0.1% to $4,257.15 an ounce.
HSBC is forecasting that gold’s bull run could push prices as high as $5,000 an ounce by 2026, citing persistent geopolitical risks and growing participation from new classes of investor.
Earlier in the month, Goldman Sachs raised its December 2026 gold price forecast to $4,900 per ounce from $4,300, citing strong Western exchange-traded fund (ETF) inflows and likely central bank buying.
The precious metal had slumped sharply on Friday after Donald Trump signalled a softer stance towards Beijing. The president said that his proposed 100% tariff on Chinese goods would not be sustainable and that he would meet with president Xi Jinping in South Korea in two weeks’ time, saying he thought “things would be fine with China”.
“High tariffs on China are not sustainable,” Trump said, comments that triggered a rally in equities and other risk assets. US Treasury secretary Scott Bessent also confirmed that talks with Chinese officials were scheduled for this week.
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The shift in sentiment reduced some of the safe-haven appeal of gold, which had surged in recent months amid heightened geopolitical risks, an extended US government shutdown and growing expectations of further Federal Reserve rate cuts. Analysts noted that Friday’s decline was amplified by profit-taking after a sustained rally over the past two months.
Oil prices fell on Monday as mounting concerns over a global supply surplus combined with escalating trade frictions between the US and China, heightening worries about a slowdown in economic growth and weaker energy demand.
Brent crude futures fell 0.7% to $60.87 per barrel at the time of writing, while West Texas Intermediate futures fell by 0.6% to $57.17 a barrel.
Both benchmarks posted declines of more than 2% over the past week, their third consecutive weekly loss, amid forecasts from the International Energy Agency pointing to a widening supply surplus by 2026.
“Fears of a supply surplus due to increased production from oil-producing countries, along with concerns about economic slowdown resulting from escalating trade tensions between the US and China, are fueling selling pressure,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.