Economy
Gold seen running further after topping $5,000 for first time
With spot gold prices clearing another milestone by hitting a record high above $5,000 per ounce on Monday, analysts expect the run could extend further toward $6,000 this year, on mounting global tensions as well as strong central-bank and retail demand.
Gold raced to a peak of $5,092.70 early on Monday as geopolitical and economic risks rattled markets. The safe-haven metal is up more than 17% this year, after soaring 64% in 2025.
The London Bullion Market Association’s annual precious metals forecast survey shows analysts projecting gold rising as high as $7,150 and averaging $4,742 in 2026.
Goldman Sachs has raised its December 2026 gold price forecast to $5,400 from $4,900.
Independent analyst Ross Norman expects a high of $6,400 this year, with an average of $5,375.
“The only certainty at the moment seems to be uncertainty, and that’s playing very much into gold’s hands,” Norman said.
Geopolitical tensions
Gold’s recent rally has been fuelled by geopolitical tensions, from the U.S.-NATO friction over Greenland and tariff uncertainty to rising doubts over the independence of the U.S. Federal Reserve (Fed), among others.
“With the upcoming U.S. mid-term elections, political uncertainty may increase further. At the same time, persistent concerns about over-valued equity markets are likely to reinforce portfolio diversification flows into gold,” said Philip Newman, a director at Metals Focus.
“After crossing the $5,000/ounce milestone, we expect further upside,” he added.
Robust central bank purchases
Central-bank gold buying, a key driver of prices in 2025, is expected to stay strong this year.
Goldman Sachs forecasts purchases to average 60 metric tons a month as emerging-market central banks continue diversifying reserves into gold.
Poland’s central bank, which held 550 tons of gold at end-2025, aims to lift reserves to 700 tons, Governor Adam Glapinski said this month.
These plans reaffirm the view that the key driver behind the spike in gold is central banks “looking to de-dollarise … and where else could you go except into gold?” Norman said.
China’s central bank extended its gold-buying spree for a 14th month in December.
ETF inflows, retail demand
Inflows into gold-backed ETFs, which store bullion for investors and account for a significant amount of investment demand for the metal, are also underpinning prices as markets expect further U.S. rate cuts this year.
“There’s an opportunity cost to holding gold which has no yield. As interest rates decline, so does this opportunity cost. If the Fed continues to lower rates in 2026, demand for gold should rise,” said Chris Mancini, co-portfolio manager of the Gabelli Gold Fund.
Gold ETFs saw record inflows in 2025, led by North American funds, according to World Gold Council data, with annual inflows surging to $89 billion. In tonnage terms, inflows totalled 801 metric tons, the highest since their record in 2020.
Gold demand for jewellery has weakened amid high prices, partly offset by a strong appetite for small bars and coins in key markets such as India.
Bar-and-coin buying is also evident in Europe, though some investors are taking profit, analysts said.
For many retail investors, gold’s appeal lies in its simplicity, said Frederic Panizzutti, global head of sales at Numismatica Genevensis, which trades precious metals coins.
“Your only risk with physical gold is the price direction. And as geopolitics and geoeconomics have become more complicated … that simplicity has become more attractive.”
What’s next for gold?
Analysts say several factors could trigger a correction, including a pullback in U.S. rate-cut expectations, margin calls in equities, and easing concerns about Fed independence.
However, most expect any pullback to be short-lived and treated as a buying opportunity.
“A meaningful and sustained decline in gold would require a return to a more stable economic and geopolitical backdrop, which currently appears unlikely,” Newman added.
Vice President Cevdet Yılmaz on Tuesday said overall financial conditions were expected to improve in 2026, adding that the government is aware of financing challenges faced by the real sector and is implementing necessary measures to ease access to funding.
Speaking at the Investment Environment Improvement Coordination Council (YOIKK) meeting in Ankara, Yılmaz said the government remains determined and coordinated in its fight against inflation while seeking to strengthen financial stability.
“As the government, we continue our determined and coordinated efforts to reduce inflation. At the same time, we aim to provide a more solid foundation for the real sector by reinforcing financial stability,” he said.
Türkiye’s annual inflation eased to 30.7% in January. But a monthly spike of nearly 5% in consumer prices triggered market doubts about whether the downward course seen throughout 2025 is on track.
Officials have dismissed those doubts, saying there’s no deterioration in Türkiye’s disinflation path but rather a slowdown mainly due to food prices and seasonal effects.
Yılmaz said the global economy is navigating a period of heightened risk and uncertainty, with geopolitical developments, financial volatility and fragile trade flows directly affecting investment decisions.
Citing data from the United Nations Conference on Trade and Development (UNCTAD), he said leading indicators point to a 14% increase in global foreign direct investment (FDI) flows in 2025. However, much of the rise stemmed from financial transactions among developed economies, and when these are excluded, the real increase stands at around 4%.
FDI flows to developing countries declined by 2%, he added.
“Within such a global outlook, Türkiye has been among the positively differentiated countries, recording a 12.2% increase in 2025,” Yılmaz said, noting that international FDI inflows reached $13.1 billion.
He said wholesale and retail trade ranked first with a 32% share, driven largely by e-commerce investments, followed by manufacturing at 31% and information and communication at 14%.
Focus on quality investments
Yılmaz said the sectoral distribution shows investments are concentrated in areas that strengthen production infrastructure, increase trade volume and enhance technological capacity.
Under Türkiye’s International Direct Investment Strategy, the government continues to prioritize climate-friendly, digital, knowledge-intensive and global supply chain-oriented investments, he added.
Yılmaz said the government expects overall financial conditions to improve in 2026 while continuing selective measures to facilitate access to financing.
“We are aware of the difficulties our real sector faces, particularly in accessing finance, and we continue to implement necessary measures, especially for labor-intensive sectors and SMEs,” he said.
He highlighted a newly announced TL 100 billion ($2.28 billion) financing package aimed at preserving employment in manufacturing enterprises, particularly small and medium-sized businesses (SMEs).
In addition, he said a new program to be launched by the Turkish Employment Agency (IŞKUR) will support youth employment and strengthen labor-intensive manufacturing firms.
Yılmaz said the government’s investment-, employment-, production- and export-oriented policies are designed to reinforce balanced growth and stability while sustainably increasing social welfare.
The Turkish central bank released the results of its first Household Expectations Survey on Tuesday, which aims to track households’ views on inflation, currency and asset prices.
According to the survey, households’ 12-month-ahead inflation expectation held steady at 48.81%, the Central Bank of the Republic of Türkiye (CBRT) said.
Use of the new data source shows 12-month-ahead inflation expectations in January and February measured 3.3 and 2.3 points lower than the consumer tendency survey.
Türkiye’s annual inflation lastly eased to 30.7% in January. But a monthly spike of nearly 5% in consumer prices triggered market doubts about whether the course seen throughout 2025 is on track.
Officials have dismissed those doubts, saying there’s no deterioration in the disinflation path but rather a slowdown mainly due to food prices and seasonal effects.
According to CBRT’s survey, households said food and fuel/energy prices rose the most in the past year, and expect them to rise the most in the next 12 months.
Share of respondents citing food as the fastest rising category fell 0.2 points to 41.1% month-over-month.
The survey also showed that the expected increase in housing prices over 12 months fell 3.82 points to 35.41%.
A separate survey by the CBRT showed 12-month-ahead annual inflation expectations decreased by 0.1 points to 22.1% among market participants and by 0.9 points to 32% in the real sector.
Price increases are expected to remain lofty near 3% this month, and policymakers said a limited annual increase in headline inflation may be seen, with food prices again weighing.
But they expect the main trend to approach the lower November-December levels from March onward.
“While we maintain our policies to limit the reflection of temporary factors on pricing behavior, we continue to support the disinflation process with supply-side steps,” Treasury and Finance Minister Mehmet Şimşek said on the social media platform X on Tuesday.
The CBRT survey showed the Turkish lira to U.S. dollar exchange rate level expectation in 12-month-ahead declined 0.71 lira to 51.56.
Foreign exchange expectations below inflation projections imply households foresee a real appreciation of the lira.
According to the survey, preference for buying gold as an investment rose 2.7 points to 55.5%, while preference for buying property fell 1.2 points to 30% compared to the previous month.
In a blog on Tuesday, the central bank said it expects continued improvement in household inflation expectations as tight monetary policy and disinflation progress, narrowing the gap between expectations and actual inflation.
Logistics major FedEx took a legal turn and has become the first to sue the U.S. government seeking a refund of tariffs it paid under an emergency powers law that the Supreme Court recently ruled was unlawfully used to impose duties, a filing showed on Monday.
In a complaint filed with the U.S. Court of International Trade in New York on Monday, FedEx demanded a “full refund” of all tariffs collected under the 1977 International Emergency Economic Powers Act (IEEPA).
The lawsuit targets U.S. Customs and Border Protection, which is part of the Department of Homeland Security.
U.S. President Donald Trump has invoked the IEEPA to impose tariffs on dozens of trading partners without congressional approval since the start of his second term. The Supreme Court ruled on Friday that the law does not authorize a president to unilaterally levy tariffs.
The justices did not decide whether the government must reimburse importers, leaving the issue to lower courts.
Several U.S. media outlets described the FedEx filing as the first major corporate lawsuit by a U.S. company following the ruling. The logistics group argued it suffered harm by paying duties that have now been deemed unlawful.
After the court’s decision, observers anticipated a wave of refund claims. According to estimates by the University of Pennsylvania, potential repayments could total about $175 billion, roughly 2.5% of the federal budget.
European Union countries have failed to reach a consensus and agree on a 20th package of sanctions against Russia, mainly due to objections from Hungary’s side as the war in Ukraine entered its fifth year on Tuesday.
According to information obtained by Deutsche Presse-Agentur (dpa) by EU diplomats, Hungary, in particular, continued to block the planned tightening of sanctions against Russia.
During a Monday meeting of EU foreign ministers in Brussels, Hungary also reaffirmed its opposition to a multibillion-euro loan for Ukraine. Instead, only a 100 million euro ($117.8 million) emergency package for Ukraine’s energy infrastructure, which EU officials say can be approved without Hungary’s backing, is now expected to be announced.
“This is a setback and a message we did not want to send today,” said the EU’s top diplomat, Kaja Kallas.
The EU had planned to use the anniversary to send a signal of support to Ukrainians and reaffirm that the bloc would stand by them in their defense against Russian aggression.
EU leaders had also aimed to show Russian President Vladimir Putin that he cannot count on fading European solidarity and should come to the negotiating table.
Druzhba pipeline dispute
Hungarian Foreign Minister Peter Szijjarto on Monday said that his country would only agree to the measures to help Ukraine if Kyiv allows the resumption of Russian oil supplies through the Druzhba pipeline.
Szijjarto accused Kyiv of deliberately blocking the use of the pipeline, which runs through Ukraine, for political reasons.
Ukraine says that Russian bombing led to the flow of oil being stopped at the end of January.
Budapest’s position was supported by Slovakia. Like Hungary, Slovakia still purchases large quantities of Russian crude oil and says that it cannot guarantee its energy security without the supplies.
“I am astonished by Hungary’s position,” said German Foreign Minister Johann Wadephul as he arrived at the foreign ministers’ meeting.
“I do not believe it is right for Hungary to betray its own struggle for freedom and European sovereignty,” Wadephul said, alluding to the Soviet Union’s decades-long rule of Hungary following World War II.
Ministers had been expected to formally sign off on the 90 billion euro EU loan and the bloc’s 20th package of sanctions on Russia.
On Tuesday, a group of senior EU officials was due to travel to Ukraine to mark the anniversary of the Russian invasion on Feb. 24, 2022.
European Council President Antonio Costa, who is among them, said in a letter to Hungarian Prime Minister Viktor Orban that he would “raise this matter directly” with Ukrainian President Volodymyr Zelenskyy.
“A decision taken by the European Council must be respected. When leaders reach a consensus, they are bound by their decision. Any breach of this commitment constitutes a violation of the principle of sincere cooperation,” Costa wrote.
Even prior to the meeting, Orban had said that Budapest would block both measures unless the Druzhba pipeline supplies resume.
“I think we shouldn’t tie together things that are not connected to each other at all,” said Kallas.
The 90 billion euro loan was initially agreed by EU leaders, including Orban, in December and then approved by the European Parliament, but still needs to be formally signed off by EU ministers.
The funding is intended to meet Ukraine’s financial and military needs until the end of 2027, enabling it to further resist Moscow’s larger military might.
The EU’s 20th package of sanctions is to include a ban on maritime services related to exports of Russian crude oil.
In addition, the European Commission has proposed additional financial restrictions to further constrain Russia’s ability to carry out international payments to fund economic activities.
There are fears in Brussels that Orban is instrumentalizing the conflict for his current election campaign.
Last week, Orban claimed without any evidence that Ukraine was interested in him losing Hungary’s parliamentary elections scheduled for April 12.
Ukraine will require about $588 billion to rebuild after nearly four years of destruction caused by Russia’s invasion, an amount nearly three times the country’s annual economic output, according to a joint assessment released Monday by the World Bank and partner institutions.
The estimated total is 12% higher than the amount given last year, amid a winter of devastating Russian attacks on Ukrainian energy infrastructure that left millions of people without heating and power.
Four years of war have decimated Ukraine’s economy, reduced entire towns and cities to rubble and forced millions to flee their homes.
Kyiv’s Western allies have pledged hundreds of billions of dollars in aid to Ukraine since Russia invaded in February 2022, but Kyiv uses most of it for the war effort and to keep its economy afloat.
“Recovery and reconstruction needs continue to grow and are now estimated at US$587.7 billion over a 10-year horizon, equivalent to almost three times Ukraine’s 2025 GDP,” the report published jointly by the World Bank, Ukrainian government, United Nations and European Commission said.
The figure was calculated based on an assessment of damage caused up to Dec. 31, 2025.
Since then, Russia has launched more devastating attacks on Ukraine’s energy grid, including waves of missile and drone strikes that have completely destroyed some power plants.
More than one in seven homes in Ukraine have been damaged or destroyed as a result of the war, the report said.
Reconstruction costs were highest in the transport sector, at an estimated $96 billion, followed by the energy and housing sectors at around $90 billion each.
Clearing debris and “explosives hazard management”, essentially de-mining efforts, will require $28 billion.
The frontline Donetsk and Kharkiv regions will need the most investment, while the capital Kyiv will require more than $15 billion to recover, the report showed.
Ukraine’s Western allies have allocated more than $400 billion in financial, military and humanitarian assistance to Ukraine since Russia’s invasion, according to data from the Germany-based Kiel Institute.
A planned EU loan of 90 billion euros ($106 billion) will mostly go towards covering Ukraine’s military expenses, with the rest earmarked for general budget support, Brussels said in January.
Output in Türkiye’s construction sector surged 7.5% on an annual basis as of December last year, and the construction index saw its record high, according to data from the country’s statistical office compiled by Anadolu Agency (AA) on Monday.
Türkiye’s construction output index, without calendar effects, rose to its highest at 151.2 points in December 2025, the data showed.
The index reached 150.4 points when adjusted for calendar effects, the highest since January 2022, when the data began to be collected, up 7.5%.
The index, adjusted for both calendar and season effects, totaled 129.1 points at the same time.
Meanwhile, all sub-sector indices of the construction production index in December 2025 reached peak highs.
The building construction index rose 8.4%, the civil engineering index 5.8%, and the specialized construction activities index 5.5% year-over-year.
Construction in 2025 offsets 2024’s slowdown
Ali Hepşen, a professor of business administration at Istanbul University, told AA that the country’s construction production saw volatility for a long time, especially due to difficulties in financing, which suppressed production in 2024.
“However, reaching a peak level like 150.4 points is important – the acceleration on construction sites has already been felt in the field since the second half of last year, and the data reflects that,” he said.
He noted that the 8.4% rise in the building construction index reflects that housing remains the sector’s driver, while the rise in non-building construction, which Turkish Statistical Institute (TurkStat) calls the civil engineering index in its data, reflects the support from public investments. Meanwhile, specialized construction activities indicate that “the supply chain is working.”
He said these developments point to a “normalization rather than a new leap.”
“The slowdown in 2024 was offset in 2025,” he said. “The relative decrease in cost uncertainty accelerated unfinished projects.”
“However, the data alone does not indicate demand health or predictability since production and financial resilience are not the same – it’s necessary to make this distinction,” he added.
Hepşen said that extending this momentum into 2026 “would not be easy,” and that the rise last year was led by the completion of delayed production, so the continuation of this momentum depends on the start of new projects, which require financing.
He mentioned that contractors are more selective than before when it comes to starting new projects due to slow sales in certain price segments, but “there is no scenario that could completely slow down the sector.”
Urban transformation, earthquake-related projects
“Investments in earthquake-prone regions, urban transformation, and public projects may continue this year, but I don’t expect the same high momentum as last year, a more limited and balanced increase is the likely outcome this year, yet the peak of last year is still very important,” he said.
“The sector likes confidence, so when the index rises, suppliers relax, and banks become less distant, but the volume growth alone doesn’t measure success, as sustainability will be determined by financing conditions and demand levels,” he added.
Mustafa Ekiz, head of Turkish construction sector service provider Real Estate and Construction Platform, said that the rise in the index shows the sector “has once again assumed its role as the driver of the economy.”
“The rise shows that the housing demand is strong,” he said, noting that the construction production activity will continue into this year, “but the growth is expected to progress more steadily.”
“Access to financing, land costs and credit conditions will determine the pace of the sector this year,” he added.
Ekiz said the sector creates employment and stimulates related sectors, while shaping the future of cities.
“Planned production, appropriate financing models, and a quality urbanization approach are needed for sustainable growth,” he said.
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