Gold prices have surged in early 2026, with spot gold trading around $4,993 per troy ounce, marking a 17% increase year-to-date. Goldman Sachs has clarified that this rally does not signal the onset of a broader commodities supercycle, despite growing investor excitement.
“Gold is something you cannot bump. It’s something you cannot scale. Production is very constrained,” said Lina Thomas, senior commodities analyst at Goldman Sachs, on the firm’s The Markets podcast.
Unlike industrial commodities such as copper, which can scale production as prices rise, gold’s supply limitations make its market unique. Goldman Sachs maintains a bullish outlook, forecasting gold to reach $5,400 per troy ounce by the end of 2026, while cautioning that an endless price surge is unlikely.
The rally has been driven by a mix of structural and tactical factors. Central banks have increased gold holdings as a hedge against geopolitical and financial risks. Federal Reserve rate cuts have lowered the opportunity cost of holding non-yielding assets like gold. Investor demand for gold call options has also pushed banks and dealers to buy bullion to hedge exposure, further fueling price gains.
Thomas noted that concerns over government debt in Western economies, the so-called “debasement trade,” are also driving buying.
Gold’s constrained supply distinguishes it from other commodities. Industrial metals such as copper respond to rising prices with increased production, making sustained supercycle-level gains harder to achieve. Silver, by contrast, has shown extreme volatility.
Liquidity squeezes in London, where benchmark silver prices are set, and movements of silver to the U.S. ahead of potential tariffs have amplified price swings. Spot silver recently traded around $75.40 per ounce, down sharply from its all-time high above $121 in late January.
While gold remains a strong hedge in times of geopolitical uncertainty and financial risk, according to Business Insider Africa, Goldman Sachs warns that the rally does not reflect a broader commodity boom. Investors should expect price movements to continue being shaped by supply constraints, central bank purchases, and market positioning rather than a sustained supercycle.
