Gold’s relentless run continues, but recent analyst calls for a price drop are looming near $4,000.
XAUUSD – Daily Chart
The price of XAUUSD has moved rapidly from a test of the $3,500 level to come close to testing $4,200. That is possible this week as momentum continues.
Amit Goel, Chief Strategist at PACE360, told CNBC that the rally in metals has all the signs of a “reflationary bubble of gigantic proportions”. Goel manages $2.4 billion worth of assets and warned that significant downside is a risk.
“It’s the wildest party we’ve seen in precious metals in a very long time,” Goel said.
“In the last 40 years, there have been only two such episodes where gold and silver did extremely well, and the dollar index was either soft or going down. In both instances, gold and silver corrected a lot after that”.
“I believe there’s a high probability that psychological issues will be addressed within the next few days or maybe a couple of weeks”.
He added that he expects to see a correction of 30-35% in gold, mimicking similar sell-offs in 2007-08 and 2011. Goel also sees the correction lasting for up to a year, with “nothing less” than a 50% correction in silver.
Economic concerns drive his comments, as he sees a global recession looming in the next two to three years, which he attributes to the U.S. The recent weakness in the jobs market has been a worry for markets, and that sectors such as semiconductors cannot take up the slack of the broader economy.
However, analysts such as Goldman Sachs remain bullish on the precious metal into the year-end, projecting a price of $4,300.
“The upside risks to our $4,000/toz mid-2026 and $4,300/toz December 2026 gold price forecast have intensified”, noted the report. It says, speculative positioning explains only a modest part of the latest rally, rather it suggests a larger underlying shift in investor behaviour”.
