Gold prices have fallen but are heading toward weekly gains amid expectations of a rebound
Gold prices fell during trading on Friday, marking the end of a volatile week, with the precious metal settling near the $4,740-per-ounce level. Despite this decline, gold still holds strong weekly gains, supported by a series of rallies that lasted for three consecutive sessions.
Why did gold decline today?
This decline in gold and silver prices resulted from investors’ tendency to temporarily reduce their positions as they await developments in the upcoming U.S.-Iran talks over the weekend.
Uncertainty surrounding the two-week-long temporary ceasefire also contributed to increased market caution.
Traders are currently opting to wait and see before the first round of negotiations on a permanent ceasefire, scheduled for Saturday in Pakistan, which is limiting gold’s upward momentum in the short term.
Gold price forecasts from some investment banks for 2026
- According to UBS analysts, the long-term outlook remains positive, with gold likely to reach $5,900 per ounce by the end of 2026, especially if market focus shifts from geopolitical tensions to global inflation risks.
- ING analysts also note that since the conflict began, the price of gold has fallen by about 10%, highlighting how macroeconomic challengesparticularly rising real yields and a strong U.S. dollar have overshadowed demand for safe-haven assets.
Higher borrowing costs tend to reduce the appeal of non-income-generating assets such as gold, while a strong dollar makes the metal more expensive for foreign buyers.
However, analysts expect continued support from ongoing central bank purchases, reserve diversification, and expectations that real interest rates will not remain suppressed indefinitely.
- ANZ analysts also noted that U.S. personal consumption expenditure data has not yet reflected the recent rise in energy prices, which could open the door to new inflationary pressures.
Markets Await Inflation Data
Investors are awaiting the release of U.S. Consumer Price Index data later today, which could play a decisive role in determining the next direction for gold. If the data comes in higher than expected, it could reinforce bets on rising inflation, thereby supporting gold prices once again.
