Gold enters long-term uptrend as global risks boost demand: Report

Mumbai, Feb 26 (PTI) Gold's long-term outlook remains bullish as global de-dollarisation, fiscal stress and increasing geopolitical tensions reshape the global financial order, according to Motilal Oswal Financial Services Ltd (MOFSL).

In its latest Precious Metals Quarterly Report, the brokerage firm said the yellow metal prices crossed the USD 5,000 per ounce mark in early 2026, marking one of the strongest long-term bull phases in modern history.

It said the gold has entered a "structural repricing phase," marking the beginning of a new supercycle rather than a cyclical rally.

MOFSL expects Comex gold to settle toward USD 6,000 per ounce (Rs 1.85 lakh per 10 grams on the domestic front) over the next 12 months, with a potential move towards USD 7,500 per ounce in the medium term if geopolitical and fiscal measures intensify.

"The long-term outlook for gold remains positive. As global reserves gradually diversify away from dollar-centric assets and physical supply remains constrained, gold prices are likely to stay supported around and above USD 5,000 per ounce," Navneet Damani, Head of Research, Commodities, Motilal Oswal Financial Services Ltd, said.

This cycle is being driven not just by inflation, but by confidence in fiscal and monetary systems, Damani added.

The report noted that gold continued to rise even when real interest rates were positive between 2023 and 2025, a period when prices would normally fall.

This shows that investors are increasingly concerned about growing global debt levels and have raised doubts about the long-term stability of fiscal and monetary systems.

Manav Modi, Analyst - Commodities, MOFSL, said: "Gold's strength despite positive real interest rates shows a clear shift in investor thinking. Real returns are increasingly seen as temporary and policy-driven, which reduces the cost of holding gold and strengthens its role as a safeguard against broader financial risks." MOFSL said that rising geopolitical tensions in Eastern Europe, the Middle East, and Asia, along with renewed trade tensions and tariff-related disruptions, have increased inflation and currency volatility.

These developments have made gold more appealing as a neutral and reliable asset during uncertain times.

Damani stated that as fiscal stress increases and questions are raised around monetary independence, gold's role as non-sovereign money has become more important, leading to a structural shift in demand.

The report also pointed out that tight global physical supply has also kept precious metal prices high, with limited mine output, shrinking inventories across major exchanges and rising production costs.

On the domestic front, rupee depreciation and strong retail buying have added to demand, while exchange-traded funds (ETFs) have seen renewed inflows after years of decline.

Central banks, too, have been steady buyers, adding around 1,000 tonnes of gold annually for four consecutive years to diversify their reserves and reduce dependency on dollar-based assets.

MOFSL expects that gold will remain well supported over the long term, as reserve diversification, limited supply growth, and ongoing global uncertainty continue to influence investment behaviour. PTI HG DR DR