Precious Metals Review

“Rising inflation could have an impact on the price of gold.

The price of gold broke numerous records multiple times in 2025, but since the end of last year, things have been more volatile. While the precious metal did set a new price record back in January, the rest of the year has been a rollercoaster of ups and downs, and prices ranged from $4,300 per ounce to $5,500 (and everything in between).

There are a lot of factors contributing to the volatility. Rising gas prices from the war in Iran have sapped potential investment money from American pocketbooks. Still-high interest rates are drawing some investors into products with better returns. And inflation is on the rise, too, now sitting at its highest point in more than three years, according to data released Wednesday.

Though inflation does mean Americans have less buying power these days, it can also be a boon for gold prices, offering a tool to safeguard wealth while the value of the U.S. dollar declines. As Hiren Chandaria, managing director at digital gold platform Monetary Metals, explains, “Gold has preserved purchasing power over very long periods of time. It has long been viewed as a hedge against inflation.”

The question is whether that high inflation is enough to send gold prices back upward again — and if so, how high can they go? We asked some experts for their thoughts on what will happen to the price of gold if inflation remains high — and what to expect if it starts to ease. 

Here’s what may happen to gold prices if inflation stays high

If the U.S. inflation rate remains high, experts say it will likely keep gold prices where they are or even push them upward again. 

“In an inflationary environment, investors often look for assets that can preserve value outside the banking system and outside fiat currencies,” Chandaria says. “That tends to increase demand for gold, especially from long-term savers and investors looking to diversify away from financial assets that may be vulnerable to higher rates, weaker currencies, or declining real returns.”

That higher demand should equal higher prices, especially if it’s sustained through the rest of the year.

“We expect gold to finish the 2026 year up about 10% from here, so in the $5,000 per ounce range,” says Thomas Winmill, portfolio manager at Midas Funds.

One thing that could throw a kink in that positive outlook for gold prices is the Federal Reserve. If inflation gets so high that the Fed decides to increase interest rates, it could dampen demand (and prices) for gold. 

“It depends on the response to inflation by central banks around the world, but primarily the U.S. Federal Reserve,” Winmill says. “If the response is to raise interest rates to fight inflation, as Paul Volker did — the Fed chair of the 1970s and 1980s, then the gold prices will drop.”

The reasoning is that higher interest rates encourage investors to put their money elsewhere — toward assets that can yield better returns. Gold acts more as a retainer of wealth, not a vehicle for serious growth or profits. Still, gold prices increased in recent years even when interest rates were being increased, so there’s not always a direct relationship between the two.

Here’s what could happen to gold prices if inflation eases

If inflation starts to ease, experts say there’s a chance it could reduce demand for gold, which would send down prices.

“Lower inflation may reduce some of the urgency around inflation hedging,” Chandaria says. “If markets believe the Federal Reserve has successfully brought inflation under control, some investors may rotate back into risk assets.”

There’s a floor to how far those prices could fall, though. 

Because of other economic conditions, there should still be a healthy market for gold, even if inflation starts to let up. That should keep gold prices elevated (at least historically speaking), for the foreseeable future, experts say.

“I don’t think easing inflation would automatically end the positive case for gold,” Chandaria says. “The reason is that gold is being supported by more than just inflation. Central bank demand, geopolitical risk, high government debt, currency concerns, de-dollarization, and the desire for portfolio diversification all remain important factors.”

The bottom line

There’s no telling where gold prices — or inflation — will end up by the end of the year, but if you’re eyeing a gold purchase, focus on its place in your overall portfolio, not just timing it right. 

“For long-term investors, I would not try to time the exact bottom,” Chandaria says. “A more sensible approach is to buy on dips and accumulate over time, while recognizing that gold can be volatile in the short run.”

And if you do opt to buy gold in 2026, watch your allocations. Financial pros generally recommend keeping your gold holdings to around five to 10% of your portfolio, maximum. 

“If inflation eases and you are overweight in gold, I suggest selling some to have the position be no more than 5% of your portfolio,” recommends Steven Conners, investment advisor and founder of Conners Wealth Management.”