Should You Buy SPDR Gold ETF (GLD) in 2026 After a 64% Rally in 2025?

The 2025 gold rally-driven by geopolitical tensions, a weaker U.S. dollar, and surging central bank demand-propelled prices to a record $4,000 per ounce, marking a 50% surge for the year. As 2026 begins, investors face a critical question: Is the SPDR Gold ETF (GLD), a leading vehicle for gold exposure, still a compelling addition to diversified portfolios amid evolving macroeconomic and geopolitical dynamics?

Structural Bull Cycle: A Foundation for Gold's Resilience

Gold's 2025 performance was underpinned by structural forces that show no immediate signs of abating. Central banks, particularly in emerging markets, continued to accumulate gold at a record pace, averaging 585 tonnes per quarter in 2025. This trend reflects a global shift toward de-dollarization and a desire to hedge against currency volatility. Meanwhile, U.S. Federal Reserve easing and elevated stock-bond correlations-driven by synchronized global monetary tightening-have amplified demand for safe-haven assets like gold.

J.P. Morgan Global Research forecasts gold prices could reach $5,000 per ounce by late 2026, with longer-term potential exceeding $6,000. Morgan Stanley similarly raised its 2026 target to $4,400, emphasizing gold's role as a barometer for central bank policy and inflationary pressures. These projections highlight gold's enduring appeal as a hedge against macroeconomic uncertainty, particularly in an environment where global debt levels remain historically elevated.

GLD's Role in a Post-Rally Landscape

The SPDR Gold ETF (GLD), the largest gold-backed ETF, has become a cornerstone for institutional and retail investors seeking exposure to gold without physical ownership. By the end of Q3 2025, GLD's assets under management surged to $472 billion, reflecting robust inflows amid heightened demand for inflation hedges. This trend underscores gold's integration into mainstream portfolio strategies, particularly as European institutional investors began allocating gold at levels comparable to sovereign bonds in 2025.

However, GLD's performance in 2026 will depend on its ability to navigate potential headwinds. A stronger U.S. dollar, driven by unexpected U.S. economic resilience or delayed Fed rate cuts, could dampen gold's appeal. Additionally, elevated gold prices may curb demand in the jewelry sector, which accounts for 40% of global consumption. For GLD, these risks could temper momentum, though structural demand from central banks and ETFs is expected to provide a floor for prices.

Portfolio Diversification: Gold's Strategic Value

Gold's role in diversified portfolios has evolved beyond a "fear-based hedge" to a strategic asset class. Historical risk-return analysis suggests allocating 8–10% of a portfolio to gold optimizes resilience during periods of high volatility or inflation. Its low correlation with equities and bonds-particularly in a post-2025 environment marked by synchronized market moves-enhances portfolio efficiency. For example, Northern Trust's research highlights that gold's inclusion in a 60/40 equity-bond portfolio reduced drawdowns by up to 30% during 2025's market turbulence.

Innovative strategies are also emerging. The WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN), which combines physical gold with mining equities, offers amplified returns while preserving capital efficiency. For GLD holders, such alternatives may complement a diversified commodities allocation, which PIMCO notes has outperformed traditional fixed income and equities in 2025.

Risks and Considerations

While the structural bull case for gold remains intact, investors must weigh several risks. A stronger-than-expected U.S. dollar or a Fed pivot to tighter policy could erode gold's gains. Additionally, high prices may trigger demand destruction in the jewelry sector, reducing gold's consumption-driven support. For GLD, these risks could lead to short-term volatility, though long-term fundamentals-such as the AI-driven green energy transition and geopolitical fragmentation- continue to favor gold as a long-term store of value.

Conclusion: A Calculated Case for GLD in 2026

The 2025 rally has redefined gold's role in modern portfolios, positioning it as both a hedge and a strategic asset. While GLD's post-rally valuation may appear stretched, its exposure to structural bull forces-central bank demand, dollar weakness, and inflationary pressures-justifies a measured allocation. Investors seeking diversification should consider a 5–8% position in GLD or complementary strategies like GDMN, balancing growth potential with risk mitigation. In a world of macroeconomic uncertainty, gold's enduring appeal remains a compelling argument for its inclusion in 2026.