Gold, which showed a spectacular rise of about 65% in the year 2025, has not been able to live up to the expectations of investors in 2026. Gold has given negative returns of about 4% till the first half of the year, due to which investors are confused whether to buy in this fall or keep distance for now.
How was the journey of gold in 2026?
The beginning of the year was good for gold. On the basis of the rise that started from October 2022, by the end of January 2026, gold reached a record of $ 5,602 an ounce. But after this tension and conflict started in the Middle East, which changed the trend of the market.
The need for cash often increases in situations like war. In such a situation, many investors started selling gold and silver to make profits. On the other hand, rising margin calls in other investments also intensified the selling.
Gold fell from January highs to around $4,000 on June 10, a decline of about 28% from the record high. At present gold is trading around $4,144. However it is still up about 23% in the last 12 months.
Why did the market mood change?
At present, the stability of the financial markets largely depends on the agreement made between America and Iran, under which it was agreed to open the Strait of Hormuz. However, there is still uncertainty about how sustainable this agreement will be, especially since Israel is not directly involved in it. After the announcement of the agreement, crude oil prices have fallen by about 15%, but gold has not been able to benefit from this.
Oil became cheaper, yet why is gold not rising?
This is the biggest question in the minds of investors. Generally, gold is affected by many factors like inflation, interest rates and geopolitical risks. At present, the biggest impact on the market is interest rates.
Federal Reserve became a big reason
Indications released after the US Federal Reserve’s FOMC meeting held on June 17 showed that interest rates may increase at least once more in 2026. New Fed Chairman Kevin Wersh also indicated adopting a tough stance to control inflation.
This means that there is little possibility of interest rate cuts in the near future. Higher interest rates are generally considered a negative for non-interest bearing assets like gold.
The strength of the dollar is also creating pressure
The US dollar index has strengthened by about 2.6% in 2026, while gold is down 4%. When the dollar strengthens, investors often stay away from gold, because dollar-based investments start looking more attractive.
Is the gold boom over?
No one has the answer to this question at present. Some experts believe that if inflation comes down and oil prices remain under control, then interest rates may be cut in future, which will again support gold.
At the same time, some experts say that if inflation remains high for a long time, then gold may again become popular as a safe investment and a means of protection from inflation.
What should investors do?
Central banks around the world have been continuously buying gold for the last few years and still have a positive outlook towards this metal. For retail investors, creating a balanced portfolio is more important than timing the market. According to experts, keeping long-term goals in mind, keeping 5% to 10% of the portfolio in precious metals like gold and silver can be a wise strategy.
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