Central banks fuel gold surge
Bernstein Raises Gold Price Forecast to $4,533 on Central Bank Demand
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Key Points
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Bernstein highlights a surge in central-bank demand for gold, citing the World Gold Council survey that 89% of central banks expect reserves to increase and 45% plan to add to their holdings over the next 12 months, with limited ETF outflows expected in a low-rate environment.
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The firm notes the inverse relationship between real rates and gold, observing real rates rising from about 2.00% in April to 2.28% in June 2026, which helped push gold down from around $4,650 to roughly $4,000 in Q2 2026.
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Aluminium tightness persists even as geopolitical risk recedes: Bernstein points to a stronger-than-expected Middle East supply recovery, with Emirates Global Aluminium restarting the Al Taweelah smelter (1.6 million tonnes annual capacity) and forecasting a return to pre-crisis shipment levels once Strait of Hormuz reopens, potentially within a year.
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China is adding about 740,000 tonnes of annual aluminium smelting capacity this year, lifting total Chinese capacity to roughly 45.3 million tonnes and supporting a market that Bernstein expects to remain in deficit in 2026 despite improved supply.
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Bernstein’s copper forecast for 2026 envisions an average price of $12,419/ton with about $11,750/ton in H2 2026 (slightly below the market consensus of $12,515/ton), and projects a longer-term path of roughly $10,700/ton by 2030 as tighter mine supply outweighs demand growth amid macro headwinds.
Bernstein has raised its gold price target for the second half of 2026 to $4,533 per ounce, up from prior estimates, citing strong central bank buying and an expectation that the Federal Reserve will hold off on aggressive rate hikes. The firm sees gold averaging around $4,375 in the full second half of 2026, even after a sharp pullback from highs near $4,650 in early Q2.
The upgrade comes as gold trades just above $4,100, recovering from a one-week low after falling oil prices eased pressure on the US dollar. Kitco noted that weak US housing data — existing home sales dropped 2.4% to 4.09 million units in June — added to the case for a cautious Fed, supporting bullion.
Central Banks Drive Gold's Bullish Long-Term Case
Bernstein's bullish outlook rests heavily on central bank demand. The World Gold Council found that 89% of central banks expect global gold reserves to rise. On top of that, 45% plan to add gold to their own holdings in the next 12 months. That is a powerful, steady source of buying that does not disappear overnight.
The firm also sees limited selling from gold ETFs. In a low-rate world, investors tend to hold gold rather than dump it. That keeps a floor under prices even when short-term headwinds appear. Bernstein's long-term target of $4,533 for H2 2026 reflects that durable demand backdrop.
Rising Real Rates Already Dragged Gold Down From Peak
Gold is not immune to rate pressure. Bernstein tracks real rates — interest rates minus inflation — as a key driver. Real rates climbed from about 2.00% in April 2026 to 2.28% by June. That rise helped push gold from roughly $4,650 down to around $4,000 in Q2. The inverse relationship is clear: higher real rates make gold less attractive.
The rebound above $4,100 this week came partly as oil prices fell and Middle East tensions eased slightly. FX Street reported gold rose more than 1.30% on Thursday alone. Still, Bernstein warns that any surprise jump in inflation or an unexpected rate hike could slow gold's recovery path.
Aluminium Stays Tight Despite Middle East Supply Rebound
Bernstein holds its 2026 H2 aluminium price forecast at $3,100 per ton. Supply is recovering faster than expected. Emirates Global Aluminium has restarted its Al Taweelah smelter, which has 1.6 million tonnes of annual capacity. The firm expects shipments to return to pre-crisis levels once the Strait of Hormuz fully reopens, possibly within a year.
China is also expanding fast. It is adding roughly 740,000 tonnes of new annual smelting capacity this year, lifting total Chinese capacity to about 45.3 million tonnes. Even so, Bernstein expects the global aluminium market to stay in deficit through 2026. More supply helps, but it is not enough to fully close the gap.
Copper Faces Macro Headwinds Despite Tightening Mine Supply
Bernstein projects copper will average $12,419 per ton in 2026. That is slightly below the market consensus of $12,515 per ton. For H2 2026 specifically, the firm forecasts about $11,750 per ton. A stronger currency and broad macro headwinds are the main drags, offsetting what is otherwise a tightening picture at the mine level.
Looking further out, Bernstein sees copper settling near $10,700 per ton by 2030. Mine supply will tighten over time, but demand growth may not keep pace as economic uncertainty lingers. Across all three metals — gold, aluminium, and copper — the firm's core message is the same: supply deficits support prices, but macro risks could delay the climb.
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