Gold price crash: Gold’s stellar rally may not be over, but the road ahead could get bumpier. After scaling record highs earlier this year, the yellow metal has come under pressure as a stronger US dollar and rising crude oil prices amid West Asia crisis weigh on sentiment.
Already in the bear territory after receding 27% from its record high level of $5,595/ounce hit in January this year, analysts foresee scope of a further decline of up to 16% to $3400-3500 levels as the yellow metal could take a breather following strong bull run. An asset is said to be in bear territory when it falls 20% or more from its recent high in a short span of time.
The majority of the correction in the precious metal seen this year has come amid the war in Middle East due to double whammy in the form of higher crude oil prices that raises concerns around inflation and Fed rate hike, and a stronger US dollar which dims the appeal of bullion for buyers of other currencies. Since end of February alone, international gold prices have crashed 23%.
Apurva Sheth, Head of Research at Samco Securities, said $4,000 is a crucial support level for gold but in the worst case or intraday panic kind of scenario, $3,500 can be possible. However, he remains bullish on the longer term gold trajectory.
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Analysts believe that geopolitical risks aided gold before the US-Iran war and may do so again as risks remain elevated, overriding higher yields and firms US dollar.
Global brokerage HSBC in a recent note, dated July 9, said that a post-Iran conflict climate will leave the world facing many of the same issues that drove gold. “While yields may be higher and the USD firmer, compared to before the conflict, other long-running issues will lend aid to bullion,” it added even as it mildly lowered its long-term outlook for gold.
HSBC slashed its gold outlook to $4,560/ounce from $4,864/ounce earlier.
Another factor that could drive the prices is central bank buying. “Many central banks continue to accumulate gold, which signals that they also expect global growth to remain under pressure. In such an environment, gold continues to be viewed as a preferred safe-haven asset,” said Hareesh V.
HSBC also said that central banks moderated purchases last year and in 1H’26 due to high prices but are key to defining a price floor and may support prices longer term.
According to a World Gold Council (WGC) survey in June 2026, global central bank are expected to increase their gold reserves over the next 12 months, highlighting gold’s increasingly strategic role within reserve portfolios. Gold’s performance during times of crisis, long-term store of value and portfolio diversification make the precious metal an attractive bet.
Central banks have accumulated an average of 1,000 tonnes of gold over the past four years, which is significantly higher from the 500 tonnes average over the preceding decade, shows WGC data.
Commenting on the longer term gold targets, Harshal Dasani, Business Head at INVasset PMS, said that on the 12-month horizon, the gold range extends toward $4,700 to $5,200, anchored on central bank Q1 2026 purchases at 337 tonnes marking the strongest first-quarter print on record, US gross federal debt at around 125 per cent of GDP, developed-market fiscal deterioration, and the multi-year geopolitical fragmentation trade continuing to compound.
“Any drawdown into the $3,900 to $4,000 gold zone is a buying opportunity, not a reversal signal,” he added.
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