Barclays: Spot Gold to Recover to $4,900 as Geopolitical Adjustments Subside

Odaily reported that Barclays believes the gold sell-off triggered by the Middle East conflict is not a trend reversal but a market reset. The bank pointed out that a significantly stronger US dollar, risk capital shifting from defensive assets to equities, and overly concentrated positions have accelerated the decline in gold prices.

Barclays estimates that the combined impact of a stronger US dollar and a 10% rise in the S&P 500 index has led to approximately a 10% drop in gold prices, with the remaining decline attributed to position liquidations. Gold is currently trading near the bank’s fair value estimate of $4,150. Barclays maintains its gold price forecasts of $4,791 per ounce for 2026 and $4,900 per ounce for 2027 but acknowledges some near-term downside risks to these projections. The bank believes that persistent inflation, policy uncertainty, and ongoing diversification of foreign exchange reserves by central banks are structural factors supporting a long-term bullish trend. A re-establishment of a weaker US dollar and a resumption of sustained central bank purchases are the two key conditions driving a rebound in gold prices.