Gold prices have fallen over 30% from their record high of nearly $5,600, now trading around the $4,000 mark with spot gold at $4,060 per ounce as of Wednesday, July 7. According to the World Gold Council's Gold Mid-Year Outlook, current gold prices are 4% above the WGC's $4,000/oz selling threshold, where sustained trading below that level could trigger additional selling. The precious metal fell on Thursday after hitting a one-week low in the previous session, as U.S. President Donald Trump's declaration that an interim agreement to end the war with Iran was "over" reignited concerns over higher inflation and interest rates. The WGC's Gold Valuation Framework values gold at about $4,100/oz ±5% based on at least one Fed rate hike by October 2026, with gold potentially trading between $3,895/oz and $4,305/oz through year-end. As per The Economic Times, oil prices extended gains after settling nearly 5% higher on Wednesday, while the dollar and stock markets dipped in response to the latest escalation in the U.S.-Iran war.
Despite a generally positive long-term outlook on gold, brokerages are adjusting their near-term expectations downward. Bank of America has notably decreased its average gold forecast for 2026 by 14% to $4,360 per ounce, citing a more hawkish Federal Reserve. Similarly, JPMorgan is indicating that risks to its gold predictions appear to trend negatively given possible early interest rate hikes by the US Fed. The research bank said it still sees $5,000 per ounce in reach for gold once the Fed's tightening cycle ends. Following is a comprehensive list of analysts' latest gold price forecasts: Bank of America ($4,360), JPMorgan ($4,545), Goldman Sachs ($4,900 by December 2026), ANZ ($5,600), Macquarie ($4,323), Wells Fargo ($6,100-$6,300 by February 2026), UBS ($6,200), Deutsche Bank ($5,500), Societe Generale ($4,600), Citi ($5,000), HSBC ($4,560), ANZ ($4,445), Standard Chartered ($4,488), Commerzbank ($4,900), and Chartered ($4,800 by mid-2026).
HSBC has lowered its average gold price forecast for 2026 to $4,560 an ounce from $4,864 earlier, while trimming its 2027 estimate to $4,925 from $5,000. The brokerage retained its longer-term forecasts for 2028 and 2029 unchanged, signalling that it expects the current weakness to be a correction rather than the end of the broader upcycle. According to HSBC, a stronger US dollar and a shift in Federal Reserve expectations have become the biggest headwinds for the precious metal, even as it maintains that the longer-term bull case remains intact. The brokerage expects gold to remain volatile over the coming quarters, trading within a broad range of $3,800-$4,700 an ounce for the rest of 2026. HSBC believes much of the anticipated hawkishness has already been priced into gold, limiting further downside, while structural factors that supported bullion before the Middle East conflict remain in place.
Despite the recent correction, Chainani believes the long-term investment case for gold remains intact as it continues to provide diversification during periods of equity market stress. According to the World Gold Council, a decline of more than 10% would likely attract long-term buying, supporting prices below the current valuation range. The WGC said a decline of more than 10% would likely attract long-term buying, supporting prices below its current valuation range. A project approved at $4,800/oz now operates with gold 13% below that assumption, rising to 17% if gold falls below $4,000/oz. Juan Carlos Artigas, Regional CEO of the Americas and Global Head of Research at the WGC, said, "Gold has come under pressure near US$4,000/oz this year and previously rebounded, supported by organic demand from long-term buyers across multiple geographies." The WGC expects gold could climb back toward $4,400 in the next few weeks with a clear catalyst needed to push it toward $4,900-$5,000 by the end of 2026.
The FOMC minutes on Wednesday, July 8 will test the WGC's $4,100/oz fair value estimate and determine whether the geopolitical premium from the US-Iran conflict expands or fades. The key metric to watch is the CME FedWatch implied probability of a September 2026 rate hike. Markets have increased their bets for a September Federal Reserve rate hike to an over 63% chance, up from about 57% on Tuesday, as per the CME FedWatch tool. A move above 60% would reinforce the WGC's base case, while a drop below 50% would support its upside scenario and J.P. Morgan's $4,300/oz Q3 target. The market's focus has now shifted decisively away from the Iran conflict and towards conventional macro drivers such as US monetary policy, real interest rates and the dollar. High gold prices continue to suppress jewellery consumption globally, particularly in India and China, where first-quarter jewellery demand fell 32 percent and 19 percent year-on-year, respectively. However, investment demand has increasingly shifted towards bars and institutional holdings, with bar and coin demand remaining resilient, particularly in Asia.
