UPDATE: Gold prices have surged approximately 50% in 2025, significantly outperforming UK shares, which have seen a robust increase of about 18% in the FTSE 100 index this year. As investors consider their options for 2026, the pressing question remains: will gold reach $5,000 per ounce, or are UK equities a more stable investment?
Gold’s current ascent is driven by multiple factors, including soaring government deficits, economic instability, geopolitical tensions, and waning confidence in the US dollar. Notably, Metals Focus, a leading UK precious metals consultancy, anticipates gold will challenge the $5,000 mark in 2026, a prediction echoed by financial giants Goldman Sachs and JP Morgan. If achieved, this price could signify a 25% increase from today’s levels.
However, experts caution that the recent rapid rise in gold prices may not be sustainable. Historical data suggests that such “parabolic” movements often lead to disappointing returns in the following years, raising questions about the long-term viability of gold as an investment for 2026.
Meanwhile, UK shares have also witnessed impressive gains, but the outlook varies. The FTSE 100’s average return over the past two decades stands at roughly 6.3%. While the index has performed well this year, some analysts predict that returns may not be as strong in 2026.
Among the notable UK stocks, the London Stock Exchange Group (LSEG) has potential for growth despite underperforming this year. Currently trading at approximately £94, analysts project a 12-month price target of around £124, implying an enticing 32% upside. Key drivers for LSEG’s potential include collaborations on AI products with Microsoft, a significant share buyback, and a renewed focus on “quality” investments within the stock market.
While risks persist—such as competition and shifts in customer spending—investors are keenly interested in whether LSEG could outperform gold investments in 2026. Some experts firmly believe that LSEG holds more promise than gold for generating returns.
What to Watch Next: As the market evolves, investors should closely monitor gold price movements and the performance of key UK stocks like LSEG. With predictions on gold prices looming and UK shares showing potential, the coming months will be critical for making informed investment decisions.
Stay tuned for updates as this story develops. Share your thoughts on whether you believe gold or UK shares will yield better returns in 2026!
