Bank of Taiwan predicts gold price volatility will continue through 2026, driven by ongoing geopolitical tensions. The bank warned that gold, while still a safe-haven asset, is unlikely to repeat last year’s record gains. Last year, US tariffs early in the year pushed prices up to NT$88,416 (US$2,817.2) per troy ounce.
Russia-Ukraine negotiations and Middle East tensions influenced market movements last year. Additionally, a weaker US dollar and expectations of looser Federal Reserve policy drove price gains. Global investors and central banks increased gold allocations to diversify and stabilize portfolios, which pushed year-end gains beyond 70 percent.
Gold maintained an upward trajectory into 2026, briefly reaching NT$175,750 per troy ounce in January. However, prices fell to around NT$153,782 by early February. Yang Tian-li, manager of the bank’s Department of Precious Metals, called the correction normal. He expects short-term lows, followed by a rebound in one to two months, and projects full-year gains of 20 to 30 percent.
Yang emphasized that potential actions by US President Donald Trump ahead of the midterm elections create key uncertainty. He also noted that investors, rather than central banks, drive gold demand, moving funds from bonds and foreign exchange markets into the metal.
Yang observed that the market now weighs geopolitical risks more heavily than potential Federal Reserve rate cuts. He advised that investors remain alert, prepare for sudden swings, and closely watch global events.
For asset allocation, Yang recommends keeping roughly a 10 percent exposure to gold. He added that other precious metals, such as silver and platinum, experience higher volatility due to greater speculative activity, which increases risk.
Overall, analysts expect gold price volatility to define the market this year. Investors should stay informed, manage risk actively, and monitor geopolitical and economic developments. The combination of global tensions and portfolio diversification will continue to influence price movements.
In summary, gold price volatility affects investor decisions, making strategic allocation essential to manage exposure and capture potential gains.
