Key Takeaways
- Gold futures declined 0.2% to $4,400.50 per ounce on Tuesday amid a rising U.S. dollar.
- The precious metal has plummeted approximately 21% from its late-January high of $5,594.82, with spot gold dropping as much as 2%.
- Market volatility increased following reports that Saudi Arabia permitted U.S. military access to the King Fahd air base.
- Market strategists from Global X ETFs and Standard Chartered continue to project gold prices reaching $5,375–$6,000 before year-end.
- Yardeni Research’s Ed Yardeni continues to forecast $10,000 per ounce by the decade’s end.
The precious metal has officially crossed into bear market territory, plunging more than 20% from its peak in January. However, numerous market experts believe the decline could be temporary.
Spot gold experienced a decline of up to 2% during Tuesday’s trading session before recovering slightly, settling at $4,335.97 per ounce. Gold futures similarly dropped approximately 2% to $4,317.80. The metal has now retreated roughly 21% from its late-January record of $5,594.82.
Continuous gold futures experienced a modest 0.2% decline, settling at $4,400.50 per ounce. Meanwhile, the U.S. Dollar Index climbed 0.4%, exerting downward pressure on the yellow metal. Since gold is denominated in U.S. dollars, a strengthening currency makes it less attractive to international purchasers.
Gold has shed 17% of its value since March began, based on FactSet figures. The dollar index has appreciated roughly 3% since tensions with Iran escalated on February 28.
Tuesday’s decline was partially attributed to a Wall Street Journal article revealing that Saudi Arabia had authorized U.S. military forces to utilize the King Fahd air base. This development represented a departure from the kingdom’s previous stance rejecting the use of its facilities in the Iran conflict.
Neil Welsh, head of metals at Britannia Global Markets, noted that markets continue to show heightened sensitivity to geopolitical news. Without a clear trajectory toward conflict resolution, he warned that gold market volatility should be anticipated.
The selloff intensified following President Donald Trump’s Monday announcement of a five-day suspension on planned strikes targeting Iran’s energy sector. This development helped reduce some of the geopolitical tensions that had previously bolstered gold valuations.
Market Experts Remain Confident in Gold’s Future
Despite the significant downturn, numerous market analysts don’t view this as a fundamental shift in gold‘s trajectory. They highlight central bank accumulation, ongoing geopolitical risks, and expectations of dollar weakness as reasons for maintaining optimistic projections.
Ed Yardeni, president of Yardeni Research, adjusted his year-end projection downward to $5,000 per ounce from $6,000. However, he confirmed to CNBC that he’s maintaining his longer-term prediction of $10,000 per ounce by 2030.
Justin Lin, investment strategist at Global X ETFs, established his year-end forecast at $6,000, describing the recent selloff as “a compelling entry point for investors.” He characterized the decline as primarily influenced by short-term dynamics including elevated interest rates and portfolio adjustments.
Lin emphasized that his optimistic perspective isn’t contingent on the Iran situation. He pointed to sustained central bank acquisitions and capital flows from Asian gold exchange-traded fund participants as the primary catalysts.
Standard Chartered maintains a constructive stance on the precious metal. Senior Investment Strategist Rajat Bhattacharya indicated the firm anticipates gold recovering toward $5,375 within the next three months, following the current selling pressure. He identified technical support near the $4,100 threshold.
Central Bank Demand Viewed as Critical Support Factor
Emerging economy central banks have maintained consistent gold purchases as they reduce dollar exposure in their reserves. Lin suggested there’s a “high likelihood” of increased central bank buying activity following the recent price decline.
Bhattacharya noted that renewed U.S. dollar weakness would provide additional support for gold valuations. With market expectations pointing toward eventual Federal Reserve rate reductions, downward pressure on the dollar could materialize.
Standard Chartered identifies the $4,100 level as a key technical support zone for gold.
