Gold outlook H2 2026: debasement trade and central bank buying

Paul Wong, CFA, managing partner and market strategist at Sprott, told a recent webcast that gold’s outlook for the second half of 2026 is supported by a renewed debasement trade and continued central bank purchases.

Wong said central bank buying that picked up after the Russia-Ukraine war has persisted and that China is still adding to its reserves. He added that more investors are positioning for currency debasement, meaning they expect paper currencies to lose value relative to hard assets such as gold.

He highlighted rising monetary instability as a long-term factor for demand. Wong pointed to loose monetary policy and large sovereign balance sheets as reasons some investors seek non-fiat stores of value. He also flagged a potential weakening of the petrodollar system that, in his view, could reduce the U.S. dollar’s global dominance and increase interest in gold as a neutral store of value.

“Long-term outlook, we still think we’re in a structural market. Essentially, the central bank buying that began with the Russia-Ukraine war is still ongoing. China is still buying. The debasement trade is, I would say, more alive than ever,” Wong said during the webcast.

Sprott offers exchange-traded funds that invest in gold mining companies. The Sprott Gold Miners ETF (SGDM) holds a mix of established gold producers listed in the U.S. and Canada. The Sprott Junior Gold Miners ETF (SGDJ) focuses on smaller producers and developers with market capitalizations roughly between $200 million and $2 billion, a segment that typically shows higher price swings.

Wong and Sprott describe mining equities as providing leveraged exposure to movements in the gold price and note that some investors use them for inflation protection and portfolio diversification.

The funds’ prospectuses describe their investment objectives, risks, charges and expenses. They warn that past performance does not guarantee future results and that funds targeting small- and mid-cap companies generally experience greater volatility. ETFs trade throughout the day; higher portfolio turnover may increase transaction costs and have tax consequences for shareholders. Sprott Asset Management USA, Inc. is the investment adviser to the funds and ALPS Distributors, Inc. is the distributor. Disclosures from the firm state that while gold and precious metals are often called stores of value or safe assets, no investment is guaranteed and any asset may lose value, including a loss of principal.