Quick overview

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Gold fell further below $5,000 an ounce in thin trading after a US holiday on Monday and with much of Asia closed for the Lunar New Year.

Bullion dropped as much as 1.4 percent on Tuesday after losing 1 percent the day before. Friday saw a brief increase in the metal as the Federal Reserve’s case for lowering interest rates was strengthened by weak US inflation data.

Non-yielding precious metals benefit from lower borrowing costs. Gold reached a record high of $5,595 an ounce in late January after a multiyear rally was pushed to its breaking point by a wave of speculative buying.

The metal has since recovered about half of its losses after a sudden, two-day meltdown at the beginning of the month, bringing it back near $4,400.

Numerous banks, such as Goldman Sachs, Deutsche Bank AG, and BNP Paribas SA., have predicted that prices will start to rise again, with the same factors that supported gold’s continuous rise expected to continue.

Analysts at Jefferies, including Fahad Tariq, increased their 2026 price prediction to $5,000 an ounce from $4,200, writing in a note that “we continue to see two main supportive macro factors for gold: inflation and dollar debasement.”

They stated that central banks and investors who are worried about these factors “have only really one option: hard assets.” However, the longer bullion stays below $5,000 in the near future, the greater the downside risk, as this “would discourage bullish traders further in light of the recent volatility,” according to a note from City Index analyst Fawad Razaqzada.