Gold has taken a hit this summer, dipping below the psychological barrier of US$4,000 per ounce on June 24. This decline marks the first time the precious metal has fallen below this level since. The drop can be attributed to a stronger US dollar expectations of higher interest rates, and easing tensions in the Middle East.
The recent decline follows a record-setting run that saw gold reach an all-time high of US$5,589.38 in January. While a correction was anticipated, the path forward remains uncertain. To shed light on the situation, let’s examine three potential price scenarios for gold: bear, neutral, and bull.
Bear Scenario: Gold Price Falls to US$3,500
Gareth Soloway of suggested in late April that gold could drop to US$4,300, with the potential for further decline. “The chart’s telling me that we’re likely coming down to this US$4,300 level,” he said. “After a small bounce, we’ll break down to US$3,900. Will that be the bottom? That’s a good question. There’s potential for a washout later this year, back to about the US$3,500 level.”
Chris Temple of the National Investor also identified fundamental reasons for a potential drop to US$3,500. He believes the US Federal Reserve is unlikely to cut interest rates in the near term. ” “That’s when gold gets going again, and we’re a little ways from that.”
Neutral Scenario: Gold Price Trades Sideways
Despite the bearish outlook, many experts remain positive about gold’s long-term prospects. Ronald-Peter Stoeferle of Incrementum noted that gold currently lacks immediate catalysts. “We’re seeing some headwinds, very weak seasonality, and lots of negative sentiment in the market, especially in the gold and silver miners,” he said in late May. Stoeferle added that he wouldn’t expect significant movement in gold and silver over the next couple of weeks but anticipated more upside after the World Cup.
Stoeferle’s ultimate target for gold in this cycle is US$8,900. He noted that historically, the end of July or beginning of August tends to be the bottom for the metal, as well as the miners. Both Soloway and Temple are also positive on gold long term, with Soloway emphasizing that if the metal does fall to US$3,500, he would be buying long-term positions.
Bull Scenario: Gold Price Rises to US$8,900
For a more immediately bullish scenario, David Hunter of Contrarian Macro Advisors anticipates a major breakout in gold and silver. At the beginning of May, he said he expects a fast run over the next few months, with gold potentially reaching US$6,800. “Post-bust, gold can get to US$20,000, and silver can get to US$1,000,” he said. Hunter clarified that his targets are for after a global bust, which he sees as a future event.
Hunter’s predictions are based on the idea that after a significant market correction, gold and silver prices could skyrocket. While his immediate target is US$6,800, he believes the long-term potential for gold is much higher.
Big Banks’ Perspectives on Gold
While market participants remain bullish in the long term, what do those outside the sector think? Goldman Sachs made headlines earlier this month when it cut its 2026 year-end gold price call from US$5,400 to US$4,900. The firm cited expectations that the Fed won’t cut rates this year, anticipating lower inflows into gold exchange-traded funds as a result.
Deutsche Bank also recently lowered its gold price outlook, forecasting US$4,800 in the fourth quarter. However, other big banks have left much higher gold price predictions intact. Wells Fargo & Co. has retained its March call of US$6,100 to US$6,300, and JPMorgan Chase is standing firm with a June outlook of US$6,000.
Whether the summer months bring changes remains to be seen. At this point, a key takeaway is that even banks that have lowered their expectations for gold still see prices going higher than they are today.
