Gold prices may rise at least 13 per cent by year-end in a reversal of recent sell-offs, as diversification demand from central banks remains intact and hopes for a diplomatic solution to Middle East tensions dial back inflation expectations, according to some money managers.

The precious metal could climb to between US$4,750 and US$5,500 an ounce by the end of 2026 in the base-case scenario, according to State Street Investment Management, the US money manager with about US$4.1 trillion of assets.

German asset-management firm DWS forecast bullion reaching US$5,400 by mid-2027.

Spot gold traded at US$4,199.11 on Friday, down more than 20 per cent from a record high in January, marking a sharp reversal from a bull run that lifted prices 65 per cent in 2025.

Investors have been pulling back as the US dollar strengthened and rising crude fuelled inflation expectations, reducing the appeal of the non-yielding metal. Some also sold gold to cover equity losses during the oil shock-induced global turbulence.

“Despite the near-term weakness, we remain constructive on gold in the medium term,” said Alexandra Symeonidi, an analyst at William Blair Investment Management. “We saw central banks returning to net buyers in April. While the debasement trade has cooled this year, its catalysts are still present.”