PRECIOUS METALS | Barclays Sees Gold Sell-Off as Market Reset, Keeps 2026–2027 Price Forecasts

Gold’s recent sell-off triggered by the Middle East conflict was not a reversal but a market reset, Barclays said. According to Jin10, the bank cited three direct drivers: a sharp rise in the U.S. dollar, equities drawing risk capital away from defensive assets, and overly concentrated positioning that accelerated the decline.

Barclays estimated that the combined effect of a stronger dollar and a 10% rise in the S&P 500 led to an approximately 10% drop in gold prices, with the remaining decline attributed to position unwinds.

Gold was trading near Barclays’ fair-value estimate of $4,150. The bank’s analysts said trading close to that level improves the risk-reward profile for re-entering the market.

Barclays kept its price forecasts unchanged at $4,791 per ounce for 2026 and $4,900 per ounce for 2027, while noting that, based on fair value, those forecasts carry some near-term downside risk.

The bank said structural factors supporting a longer-term bullish trend include persistent inflation, policy uncertainty, and ongoing central bank diversification of foreign-exchange reserves. It added that these variables tend to build slowly and therefore did not provide clear support during the acute phase of the crisis.

Barclays calculated that each 1 percentage point increase in inflation is associated with about a 5% rise in gold prices, suggesting inflation effects from energy shocks may ultimately provide support. It said a renewed weakening of the dollar and a return to sustained central bank buying are two conditions for a rebound in gold prices.