Fiscal jackpot to send gold to $5,000 next year?

The rise in gold prices can be attributed to several key factors. Significant fiscal issues faced by the US, Europe, and Japan in 2026 could propel gold prices higher. The US is grappling with an expanding fiscal deficit, pushing its debt-to-GDP ratio over 120%. Policies aimed at increasing federal revenue by imposing tariffs alongside pressure on the Federal Reserve to cut rates may further weaken the dollar and drive investors toward gold. In Europe, the economic tug-of-war between France and Germany highlights increasing fiscal concerns, especially as France struggles under economic and political uncertainty while Germany seeks to loosen fiscal constraints. This places the European Central Bank in a difficult position regarding interest rates. With Japan's new Prime Minister Sanae Takaichi pushing for aggressive fiscal spending, the yen may lose its status as a safe-haven currency, benefiting gold as a preferred alternative. Central bank demand for gold remains strong, suggesting a continued bullish outlook despite the inherent risks of overheating in the market.