① Gold prices have retreated more than 20% from their January record high, with several Wall Street institutions lowering their year-end and fourth-quarter target prices.
② Gold ETF outflows continue, while central bank gold purchases remain one of the few sources of demand with sustained support in the market.
June 24 — On Wednesday, spot gold prices fell below the key psychological threshold of $4,000 per ounce for the first time since November 2025, primarily pressured by a stronger US dollar and rising market expectations of further interest rate increases.
Spot gold dropped more than 3% at one point on Wednesday, hitting a recent low of $3,964.64. Meanwhile, silver fell more than 5% at one point, breaking below the $60 per ounce mark.
As of press time, losses in both metals had narrowed somewhat, with spot gold down 2.5% at $4,043.4 per ounce and spot silver down 4.3% at $58.94 per ounce.
Over the past three years, gold has recorded double-digit gains annually, with prices more than doubling amid combined demand from central banks, asset management institutions, and retail investors.
However, the rally began to lose momentum in late January this year, when gold hit a record high of $5,594.82 per ounce. As of June, gold prices had fallen more than 20% from their peak, which by market convention signals that gold has entered a bear market.
One of the main factors weighing on gold was the earlier US-Iran war. Rising energy prices pushed up inflation and increased market expectations for Federal Reserve rate hikes.
Since gold itself does not generate interest income, its appeal declines relative to yield-bearing assets such as US Treasuries in a rising rate environment.
As the United States and Iran engage in negotiations toward a permanent peace agreement, international oil prices have now fallen sharply. Brent crude, the international benchmark, dropped more than 4% on Wednesday and is currently trading below $74 per barrel, falling below $75 per barrel for the first time since the Iran war broke out.
However, after the Federal Reserve’s latest monetary policy meeting released hawkish signals, combined with persistent market concerns over inflationary pressure potentially stemming from the Iran war, traders significantly increased their bets on a US rate hike this year.
Independent metals trader Tai Wong said: “The market now expects the Federal Reserve may hike rates as early as September, the dollar index has risen to a 13-month high, and inflation expectations have declined — these factors are placing heavy pressure on the precious metals market.”
He added: “For gold, there is some support below $3,900, and central banks are still continuously purchasing gold, so the possibility of a collapse is not high.”
But as gold trading is no longer favored by the market, it may enter a relatively long consolidation period in the future.
Ewa Manthey, commodities strategist at ING Group, said in a report released on Wednesday: “The main reason for gold’s recent decline is that the market has significantly repriced the future path of interest rates.”
Goldman Sachs analysts noted that the hawkish stance of incoming Federal Reserve Chairman Warsh may ease market concerns about the independence of central banks in developed economies.
Previously, such concerns drove investors to participate in the so-called “Debasement Trade,” namely buying assets such as gold and bitcoin to hedge against the risk of fiat currencies such as the dollar depreciating due to fiscal and monetary expansion.
Institutions Lower Gold Price Targets One After Another
Over the past week, multiple Wall Street institutions have lowered their gold price forecasts. Although the latest targets remain above current levels, analysts’ optimism has clearly diminished.
ING expects the average gold price to be $4,300 per ounce in the third quarter of 2026 and $4,600 in the fourth quarter; previous forecasts were $4,850 and $5,000, respectively.
Goldman Sachs cut its year-end gold price forecast by $500 to $4,900 per ounce; Deutsche Bank lowered its fourth-quarter gold price forecast by 17%.
Deutsche Bank also pointed out that gold ETFs continue to experience fund outflows, indicating that an important source of buying support for gold prices is “notably absent.”
However, central bank demand remains one of the few bright spots in the gold market. In the first quarter of this year, central banks increased their gold holdings at the fastest pace in more than a year, and multiple surveys also show that central banks still plan to continue buying gold in the future.
“The only pillar that remains strong at present is central bank demand, and we expect this trend to continue for some time,” Deutsche Bank said.
