Gold Enters Structural Repricing Phase as Global Financial Order Shifts
Gold's long-term outlook remains robustly bullish, with a new supercycle emerging as global de-dollarisation, escalating fiscal pressures, and intensifying geopolitical conflicts fundamentally reshape the international financial landscape, according to a comprehensive report by Motilal Oswal Financial Services Ltd (MOFSL).
Price Targets: $6,000 in 12 Months, $7,500 Medium-Term
In its latest Precious Metals Quarterly Report, the brokerage revealed that gold prices have already crossed the $5,000 per ounce threshold in early 2026, marking one of the most powerful long-term bull phases witnessed in modern economic history. MOFSL anticipates Comex gold settling towards $6,000 per ounce over the next twelve months, equivalent to approximately Rs 1.85 lakh per 10 grams in domestic Indian markets.
The firm projects even greater potential, with prices possibly advancing towards $7,500 per ounce in the medium term should geopolitical and fiscal pressures intensify further. "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 $5,000 per ounce," stated Navneet Damani, Head of Research, Commodities at MOFSL.
Drivers Beyond Inflation: Confidence Crisis in Monetary Systems
Damani emphasized that the current cycle is propelled not merely by inflationary trends but by a deeper crisis of confidence in fiscal and monetary frameworks. "This is being driven not just by inflation, but by confidence—or the lack of it—in fiscal and monetary systems," he explained, highlighting gold's evolving role as non-sovereign money gaining prominence amid questions over monetary independence.
Defying Conventional Wisdom: Gold Rises Despite Positive Real Rates
The report underscored a remarkable anomaly: gold continued its ascent even during periods of positive real interest rates between 2023 and 2025, a phase when prices traditionally decline. This trend signals that investors are growing increasingly anxious about mounting global debt levels and the long-term stability of economic policies.
"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," commented Manav Modi, Analyst - Commodities at MOFSL.
Geopolitical Tensions and Supply Constraints Bolster Support
Escalating geopolitical tensions across multiple regions are providing substantial support:
- Conflict hotspots in Eastern Europe, the Middle East, and Asia
- Renewed trade tensions and tariff-related disruptions
- Heightened inflation and currency volatility
These factors collectively enhance gold's appeal as a neutral and reliable asset during times of uncertainty. Simultaneously, tight global physical supply conditions are maintaining upward pressure on prices through:
- Limited mine output expansion
- Shrinking inventories across major exchanges
- Rising production costs
Domestic Demand and Central Bank Accumulation
On the domestic Indian front, rupee depreciation and robust retail demand have provided additional support for gold prices. Exchange-traded funds (ETFs) have experienced renewed inflows following years of decline, indicating renewed institutional interest.
Globally, central banks have emerged as consistent buyers, accumulating approximately 1,000 tonnes of gold annually for four consecutive years as part of strategic efforts to diversify reserves and reduce dependence on dollar-denominated assets.
Long-Term Outlook: Structural Shifts Favor Gold
MOFSL concludes that gold will remain well-supported over the extended horizon, driven by three primary factors:
- Reserve diversification away from dollar-centric holdings
- Constrained supply growth in physical markets
- Persistent global economic and geopolitical uncertainty
The brokerage's analysis suggests that gold has entered a "structural repricing phase" that represents the beginning of a new supercycle rather than a temporary cyclical rally, positioning the precious metal as a critical component in portfolios navigating the evolving global financial architecture.
