The gold market in 2026 has proven challenging to navigate. Year-to-date returns for the precious metal are nearly flat, yet its cumulative gain over the past twelve months still exceeds $1,000. Last week, gold posted its strongest single-week performance since January, while gold mining stocks recorded their most robust five-day rally since 2008. This has prompted some investors to renew their bets on a sustained rebound, though the market also faces the risk of a pullback.

Pippa Malmgren, a former special assistant to President George W. Bush and a former member of the National Economic Council, believes the long-term factors supporting gold have not vanished. "Gold is the new gold," Malmgren stated. She argues that runaway U.S. fiscal spending and weak economic growth in other parts of the world mean inflationary pressures are likely to persist. Malmgren also noted that the Trump administration's costly overseas military engagements have heightened unease among some investors. In this environment, some capital is rotating back into gold as a conservative store of value. The continued increase in gold reserves by global central banks is a key manifestation of this trend.

Patrick Kennedy, founder and managing partner of AllSource Investment Management, commented, "Central banks have never stopped buying." Billionaire hedge fund manager John Paulson is also bullish on gold. In a recent interview with CNBC, he stated that gold is still in the early stages of a long-term upward trend, driven by factors including declining confidence in fiat currencies and uncontrolled government spending. Paulson has been a gold bull since 2009.

Mild Inflation Lowers Hike Expectations, But It's Not a Rate-Cut Trade Yet

The recent resurgence of interest in gold has a more direct catalyst in changing U.S. interest rate expectations. Joe Cavatoni, Senior Market Strategist at the World Gold Council, believes the recent buying by U.S. investors is more tactical in nature, rather than being purely driven by risk aversion. "Gold's recent rally seems more driven by shifts in interest rate and economic outlooks than by fear alone," Cavatoni said. Following signs of labor market weakening, investors quickly adjusted their rate expectations, and gold, as an asset highly sensitive to the macroeconomic environment, responded accordingly. Cavatoni noted that U.S. capital inflows into gold show a tactical character, evidenced by increased options trading activity in the SPDR Gold Trust ETF (GLD). In contrast, gold buying in Asia and Europe has been more consistent.

The latest inflation data has further reinforced this shift. The market viewed the July CPI report as relatively benign, which lowered expectations for further rate hikes. A weaker dollar typically enhances gold's appeal relative to other interest-rate-sensitive assets. Nick Cawley, a contributing analyst at UK-based bullion dealer Solomon Global, stated that expectations for a rate hike had already begun to recede before the latest inflation data, dropping by more than 20 percentage points over the past week. Cawley believes this indicates the market is becoming more cautious about further tightening, a view reinforced by the recent mild inflation data and last Friday's disappointing non-farm payrolls report.

However, Kennedy emphasized that a lower probability of a rate hike does not mean the market has entered a rate-cut trade. "This is not a rate-cut trade, at least not yet," Kennedy said. He noted that the Federal Reserve is expected to keep rates between 3.50% and 3.75% for the entire year, and before the weaker-than-expected jobs report, a September rate hike was still a real possibility. The latest CPI data showed a monthly increase of 0.1%, an annual rate of 3.4%, and core CPI at 2.5%, all broadly in line with expectations. Kennedy believes the real change is that the tail risk of a rate hike has been significantly removed from market pricing. His firm's assessment is that the first-half gold sell-off presented a buying opportunity, not a signal of a market top. The company bought and added to its position in the physical gold ETF GLDM after gold formed a technical bottom in July. "The tail risk of a rate hike has been taken out of the market," Kennedy said. But he stressed that the current market environment is not the same as a rate-cutting cycle, a distinction crucial for determining whether gold's rally can be sustained.

From a technical perspective, Cawley believes gold has broken above its 50-day moving average, simultaneously breaking the pattern of lower highs seen since the start of the year. Based on this view, any subsequent pullback might be a short-term correction, potentially offering an opportunity to re-enter the market for the next leg higher.

Mining Stocks Amplify Gold's Move, Risks Also Amplify

Alongside gold's rise, investors are also turning their attention to gold mining stocks. Vince Stanzione, an independent trader and author of "The Millionaire Dropout," said some traders and investors are seeking value opportunities in the equity market within gold mining stocks. He pointed out that some high-quality miners trade at single-digit forward price-to-earnings ratios while also paying substantial dividends. Stanzione mentioned AngloGold Ashanti and S&P 500 component Newmont, noting that retail investors tend to access this sector via ETFs. The Van Eck Gold Miners ETF (GDX) primarily covers large-cap gold miners, while the Van Eck Junior Gold Miners ETF (GDXJ) focuses on mid- and small-cap miners.

Stanzione also noted that many gold miners also have silver assets, and silver has recently followed gold higher, posting its best weekly performance since February. Shawn Young, Chief Analyst at MEXC Research, believes investors can express a bullish view on precious metals through different instruments. The SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) are more direct gold ETF tools, while the iShares Silver Trust (SLV) offers higher-volatility exposure to silver. "GDX rose roughly three times as much as gold last week... and the moves in mid- and small-cap miners were even more violent," Kennedy said. He cautioned that for most individual investors, mining stocks are better suited as "satellite holdings" rather than core portfolio positions.

Gold's next move will depend on macro policy changes. Cavatoni believes the upcoming Federal Reserve meeting in Jackson Hole, Wyoming, and broader policy developments, will likely determine whether the current rally can continue. The policy communication style of the new Fed Chair, Kevin Warsh, has also become a variable for the market. Eugenia Mykuliak, Founder and Managing Director of B2Prime Group, believes Warsh's appointment has already altered the market landscape, describing his remarks as "cautious and often ambiguous," including his statements at his first FOMC meeting, which have added to market uncertainty. Mykuliak argues that gold began to rise after the change in leadership at the Fed. When the market is uncertain about the central bank's future policy direction, capital may rotate from equities into relatively safe assets like gold and other metals.

Kennedy also believes that Fed policy uncertainty could continue to support gold. He notes that when the labor market is clearly weakening but the Fed Chair signals a "higher for longer" rate stance, it can create a stagflationary environment. If the market begins to doubt the Fed's ability to fulfill its dual mandate of stable prices and maximum employment, gold tends to benefit. At the same time, gold's previous significant rally means the market needs to digest some overly concentrated positions. Kennedy pointed out that gold more than doubled from late 2023 to its record high in January 2026, leading to overextended positioning. However, he believes this hasn't undermined gold's long-term structural bullish thesis, and new catalysts may emerge. Brent crude oil is currently near $90 per barrel, the Strait of Hormuz remains closed, and Iran has set conditions for its reopening. Therefore, even with July's cooling inflation data, forward inflation risks persist.

Mykuliak similarly believes inflation will remain a key variable for gold's trajectory. If the market continues to assess that price increases remain moderate, gold still has room to rise further. She even suggested, "Gold prices could potentially rise to levels above the January high." Meanwhile, continued buying from China and India, the core regions for physical gold demand, persists. Mykuliak believes that based on price action since the start of the year, gold is currently at a relatively low level and therefore retains further upside potential.