Can gold continue dream run in 2026?

Glencore-Rio Tinto Merger & Gold Market Outlook - 2026

Key Concepts:

• Merger & Acquisition (M&A): The combination of two companies into a single entity.
• Safe Haven Asset: An investment that is expected to retain or increase in value during times of market turbulence. Gold is traditionally considered a safe haven.
• Risk-On/Risk-Off Environment: Describes investor sentiment. "Risk-on" indicates a willingness to invest in potentially higher-growth, but riskier, assets like equities. "Risk-off" indicates a preference for safer assets like gold.
• Exchange Traded Products (ETPs): Investment funds traded on stock exchanges, including gold ETFs.
• Dorization: The process of central banks reducing their reliance on the US dollar and increasing their gold reserves.
• Geopolitical Risk: Risks stemming from political instability, conflicts, or tensions between countries.

---

I. Corporate News: Glencore & Rio Tinto Merger Discussions

The broadcast began with breaking news regarding preliminary merger discussions between Glencore and Rio Tinto. Glencore has confirmed these talks. A successful merger would result in the creation of the world’s largest mining company. The report indicated continued monitoring of these developments throughout the day.

II. Gold Market Performance in 2025 & Outlook for 2026

The segment then transitioned to a discussion of gold’s performance and future prospects, featuring Chris Looney, Director and Gold Strategist at RBC Capital Markets. Looney highlighted gold’s outperformance in 2025, exceeding returns from major bonds, equities, and cryptocurrencies. The focus shifted to forecasting gold’s price trajectory in 2026.

III. Key Drivers of Gold’s Performance in 2025

Looney identified pervasive uncertainty as a primary driver of gold’s strong performance in 2025. This uncertainty stemmed from various sources including:

• Tariffs & Trade Disputes: Global trade tensions contributed to investor anxiety.
• Federal Reserve (Fed) Policy: Uncertainty surrounding the Fed’s monetary policy decisions.
• Macroeconomic Factors: A broader range of economic uncertainties played a role.

He noted a supportive freight environment and significant inflows into gold through Exchange Traded Products (ETPs) as contributing factors. Both central banks and individual investors increased their gold allocations. The combination of macroeconomic factors and uncertainty created a favorable environment for gold price appreciation.

IV. Gold & Equities: An Unusual Correlation

The discussion addressed the unusual simultaneous strength observed in both gold and equity markets in 2025. Traditionally, gold is considered a negatively correlated asset to equities, acting as a hedge during market downturns. However, in 2025, both asset classes moved together. Looney explained this phenomenon by stating that investors, even in a “risk-on” environment, maintained a high appreciation for uncertainty and continued to allocate to gold as a hedge.

He observed a shift in investor allocation strategies, with typical gold allocations in portfolios increasing from 2-5% to 5-10% throughout 2025, even as investors pursued performance in equity markets. This increased demand drove prices higher alongside equity market gains.

V. Quantifying Uncertainty & Central Bank Demand

Looney discussed the difficulty in quantifying uncertainty. While traditional macroeconomic models (considering factors like the dollar, unemployment, interest rates, and inflation) couldn’t fully explain gold’s price performance, incorporating measures of uncertainty from various indexes improved model accuracy.

He emphasized the importance of anecdotal evidence – consistent conversations with investors – in understanding the drivers of gold demand. The World Gold Council’s 2025 central bank survey revealed that geopolitics was a significant factor driving central bank allocations to gold, alongside diversification and “dorization” (reducing reliance on the US dollar).

VI. RBC Capital Markets’ 2026 Gold Price Projections

RBC Capital Markets projects gold prices to trade in the $4,500 to $5,000 per ounce range throughout 2026, potentially reaching higher levels by late 2026 and into 2027. Looney stated that gold is expected to continue its upward trajectory, even with anticipated positive performance in equity markets.

The primary upside risk to this projection lies in significant “risk-off” events, which would amplify gold’s role as a safe haven asset and drive substantial inflows, potentially exceeding the high-end scenario price of $5,000.

VII. The Likelihood of Risk-Off Events

In the final moments of the interview, Looney acknowledged the unpredictability of events, stating that the lessons of 2025 demonstrate that uncertainty and unexpected events are likely to occur. He suggested that the early signs of uncertainty in 2026 support this outlook.

VIII. Notable Quote:

“If we learned anything over 2025 is that uncertainty and unexpected events happen and I’d argue that 2026 we’re already seeing that now.” – Chris Looney, Director and Gold Strategist at RBC Capital Markets.

Conclusion:

The broadcast highlighted the ongoing merger discussions between Glencore and Rio Tinto, and provided a detailed analysis of the gold market. The key takeaway is that gold’s strong performance in 2025 was driven by pervasive uncertainty, and this trend is expected to continue in 2026. While gold is projected to trade in the $4,500-$5,000 range, significant risk-off events could push prices even higher. Investors are increasingly allocating a larger portion of their portfolios to gold as a hedge against uncertainty, even in a generally positive equity market environment. The role of geopolitics and central bank demand are also crucial factors influencing gold’s price trajectory.