Gold Falls Nearly 10% As Banks Maintain $5,800 Price Outlook

About this update from Gold Bond Group Ltd.

Gold (GLD) prices have come under notable pressure in recent weeks, but major banks are continuing to frame the move as a short-term dislocation rather than a shift in the broader trend. Since the Middle East war began in February, bullion has fallen nearly 10% from its January record above $5,500 an ounce, with rising Treasury yields, a stronger dollar, and conflict-driven volatility prompting some investors to move into cash. Despite this pullback, analysts across institutions suggest the longer-term setup could remain constructive.Analysts at ANZ Banking Group and Goldman Sachs Group NYSE:GS point to several underlying drivers that could support a recovery over time. Central bank demand is expected to remain a key pillar, with official purchases projected at around 850 tons in 2026, while ongoing geopolitical uncertainty and a gradual diversification away from dollar-denominated assets continue to influence allocation trends. At the same time, expectations for Federal Reserve rate cuts, including roughly 50 basis points this year according to Goldman, are seen as supportive, particularly if the macroeconomic mix of growth and inflation weakens and reopens the path for easing.That framework is reflected in current price forecasts, even as near-term risks remain in focus. ANZ continues to project gold reaching $5,800 an ounce by year-end, while Goldman maintains a $5,400 forecast, both tied to sustained central bank buying and shifting macro conditions. Goldman analysts have also highlighted potential tactical downside risks if disruptions in the Strait of Hormuz persist, suggesting volatility could continue in the short run. Spot gold was trading near $4,747.94 an ounce at 11:04 a.m. London time, indicating that while the path may remain uneven, the longer-term outlook could still point toward recovery.

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