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- Gold Gains Forecasted
Due to poor investor confidence in 2025, affected by events like Trump’s aggressive tariff regime and concerns over an AI bubble, the price of gold had risen by over 60% the past year. Analysts predict that this trend will continue throughout 2026, albeit at a lower rate.
MKS Pamp is a precious metals group, which predicts that gold would have a gain of 25% by the end of 2026 - the highest forecast. Whilst there are also a number of analysts that suggest gold would actually fall in value by the end of 2026, major investment banks like JP Morgan and Goldman Sachs all predict that gold would indeed rise.
Why is gold bought? Unlike typical means of investment, gold is seen as a stable asset, which does not theoretically gain or lose value. Gold has historically been seen as a means of storing value for this reason, not dissimilar to leaving money in the bank. However, what has happened in 2025, and what is forecasted for 2026, seems to buck this concept.
What factors are driving the rise of gold prices?
- Trump’s activities are still making investors uneasy, like the recent Venezuela strikes
- The debasement trade is an investment strategy whereby investors move money into assets like gold and real estate out of fear from fiscal policy
- More people are seeing gold as a short-term investment strategy rather than a means of storing value, which simply drives up demand.
- Electric Vehicles Slow Down
Electric vehicle (EV) sales are only projected to grow 13% during 2026, a far cry from the estimated 22% increase in 2025. This is partly driven by a 29% contraction in the US market, cooling demand in China (the world’s largest EV market), and the EU’s relaxation of the 2035 petrol car ban.
Years of explosive China-led growth formed the impression that the demise of petrol cars was highly imminent. Especially given that Chinese manufacturer BYD had replaced Tesla as the world’s largest electric carmaker. However, this highly imminent transition seems to have been over-eager, as hybrid vehicles gain ground and electric manufacturers face slowdowns / losses. An example is Ford taking a $19.5 billion hit due to cancelled EV projects, including its flagship F-150 electric truck.
What are the implications of this slowdown?
- Industry pivot towards hybrid vehicles as consumers shy away from full electrification
- Further US and EU government policy volatility creating strategic uncertainty for carmakers
- Chinese manufacturers using this opportunity to widen gap from Western manufacturers via lower-priced EVs.
Knowing the story isn’t enough. In applications and interviews, firms expect you to explain why this matters commercially and how it affects clients. The Commercial Awareness Starter Pack shows you exactly how to do this using a simple, repeatable framework.
How to use this in applications
- Gold is a good indicator of market confidence. When the market is up, gold prices are typically low. The inverse is an indicator that the market is slowing, or that investors forecast a downturn. Right now, the latter seems to be a bigger driver for the rise in gold prices. This might be worth bringing up in applications and interviews when talking about the clients law firms will be serving, and pointing out what events exactly might play into this predicted downturn (or whether you might believe that the downturn is wrongly predicted).
- Regulatory ambition can often be undercut by market reality in instances like this, further impacted by short-term policy decisions and unreliable consumer intentions. In previous years, people have talked about EVs in law firm interviews as the big new development which is taking over - this news demonstrates the opposite can be true. Consider whether this slowdown will continue into 2027 and ultimately why the promising trend in EV development has hit a dead end - is this merely a slowdown, or signs of a new trend leaning in favour of petrol and hybrid vehicles.
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