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

Odaily Planet Daily News Barclays believes that 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 due to stock market attraction, and overly concentrated positions 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 unwinding. Currently, gold is trading near the bank's fair value estimate of $4,150. Barclays maintains its 2026 and 2027 gold price forecasts of $4,791 and $4,900 per ounce, but acknowledges some short-term downside risks to these projections. The bank believes that persistent inflation, policy uncertainty, and ongoing efforts by central banks to diversify foreign exchange reserves are structural factors supporting the 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 for driving a rebound in gold prices.