Gold price prediction: Gold has always given strong assurance of safe investment to investors, but at present this yellow metal seems to be under heavy pressure. Gold prices have now fallen by more than 30 percent from their historical high (record high) of around $5,600. At present it is trading around $4,000. This sharp correction has pushed gold into the category of negative returns for this year.
This weakness continued in the market on Tuesday also. present Sleep Gold futures for August delivery fell 0.8% to $4,129.36 an ounce, while US gold futures for August delivery slipped 0.6% to $4,140.90. This fall has come when only last week, due to weak US employment data, gold had seen a spectacular recovery of 2%. Now the question is why gold, which is considered a companion in every crisis, is suddenly falling so much.
Why did the price of gold fall?
There are many important reasons hidden behind this big decline. According to Renisha Chainani, Augmont’s research head, despite the tensions in the Gulf countries, the attention of investors has now shifted from ‘safe investments’ to interest rates, bond yields and other conditions of the financial market. The Iran war led to a major energy crisis, which again intensified fears of rising inflation. Due to this fear, hopes of cutting interest rates this year were dashed. Additionally, when technology and artificial intelligence (AI) stocks booked huge profits in late June, investors sold their gold to raise cash.
Is this decline a sign of a bigger crisis?
Market experts believe that the current weakness is not structural but cyclical. This simply means that the future of gold is still strong in the long term. During the US-Iran tension, crude oil attracted all the attention of the market, due to which investors thought it right to book profits by selling the gold they held. From a technical point of view, the level of $3,950 to $4,000 has proved to be a very strong ‘support zone’ for gold. Prices have moved back up from the same level before and it is expected that this support will continue in the future also.
There will be a big rise in gold soon
For those who want to maintain their investment in gold, the future picture is quite positive. It is estimated that gold may touch the level of $4,400 again in the coming few weeks. At the same time, by the end of 2026, with the help of some clear trigger, it can go up to $4,900 to $5,000. If conditions remain favourable, a new record high may also be seen in 2027. Crude oil prices have fallen by 40% in the last quarter, which is expected to reduce inflationary pressure. The inflation parameters that Federal Reserve chief Kevin Warsh relies on the most are also expected to remain close to the target. In such a situation, the next cut by the Federal Reserve may take place in 2027, which will once again give great strength to gold.
The stance of central banks will decide the direction
Even though there has been a selloff on the Exchange Traded Fund (ETF) front this year, central banks around the world are silently increasing their gold reserves. According to a survey by the World Gold Council, 84% of central banks are going to increase the share of gold in their reserves in the next five years. The campaign to reduce dependence on the dollar is also giving internal strength to the demand for gold.
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