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

Odaily Planet Daily reported that Barclays believes the sell-off in gold triggered by the Middle East conflict is not a trend reversal, but a market reset. The bank noted that a significantly stronger US dollar, risk capital shifting from defensive assets to equities due to stock market attraction, and overcrowded positioning have all accelerated gold's decline.

Barclays estimates that the combined impact of a stronger US dollar and a 10% rise in the S&P 500 index has caused gold prices to fall by approximately 10%, with the remaining decline attributed to position unwinding. 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 downside risk to these projections in the near term. The bank believes that persistent inflation, policy uncertainty, and central banks' ongoing diversification of foreign exchange reserves are structural factors supporting the long-term bullish trend. A re-establishment of a weaker US dollar and the resumption of sustained central bank buying are two key conditions for driving a gold price rebound.