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We've seen gold decline by over 21% from the all-time high of $5,589/oz in January 2026. Gold is currently trading at $4,307/oz. And, as interest rates are expected to increase by the Fed, as ten-year bond yields are up sharply (making non-interest paying gold look less attractive), and, as a result, the dollar has strengthened, and, as a result, the price of oil has risen sharply (now trading above $92/bbl of Brent crude oil), we see a selloff in sovereign debt all over the globe, including the commodity market.
While the combination of Fed hawkishness, strong bond yields, a strong dollar, higher oil prices (Brent crude is up above $92/bbl as new Middle East hostilities impact global oil supplies and threaten the Strait of Hormuz) and a selloff in global sovereign debt are putting downward pressure on the price of gold, the underlying factors driving up the price of the precious metal remain firmly in place. Gold is not having a 'structural breakdown'; rather it is experiencing a technical correction.
But the mainstream press seems oblivious to the fact that the price of gold is falling because the Fed is hiking. In other words, this is not a breakdown in the structure of the price of gold in response to the Fed's actions — it is a correction within the biggest bull market in gold in history.
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We saw gold trade above $5,500 per ounce in January for the first time in three years as central banks, including those from Russia, China, India and dozens of other countries, continue to add to their gold reserves as part of a de-dollarization of their reserves. Meanwhile, U.S. debt has reached levels that will have no easy solution and continues to rise. As for inflation, it is rising and continuing to be underestimated by the numbers put out by official sources. The global geopolitical environment, meanwhile, is not improving with two wars currently being waged and a naval blockade in the Red Sea and a conflict between the U.S. and Iran that is now entering "Phase Two" according to the Vice President.
The Fed's statements will undoubtedly cause gold to decline in the short term, but history has shown us that the largest corrections in the price of gold during a major bull market occur when investors purchase the metal at lower prices in anticipation of future gains.
Analysts at J.P. Morgan, UBS and FXEmpire have outlined a number of targets for gold. The investment bank expects the metal to rise to $6,000 per ounce by the end of the year, while the Swiss banking giant believes it will hit the same price mid-to-late 2026. Meanwhile FXEmpire forecasters project $4,800 to $5,275 over the next three to six months, and $5,600 to $6,000 longer term — implying 10% to 40% returns from today's levels.
Compare that with the alternatives. Sure, bonds are dropping in price. Stocks are pricing in Fed rate hikes but falling as corporate earnings guidance weakens. The dollar is strongest against other fiat currencies but is deteriorating in the long run as dollar-denominated global reserves as a percent of total central bank reserves continue to decline. And cash at 3.5%? That's not keeping pace with real inflation that most honest economists peg well above the Fed's preferred measures.
We expect the price of gold to continue to appreciate, as the drivers behind the multi-year appreciation of gold are increasing in intensity, not decreasing: debt, de-dollarization, geopolitical fragmentation and currency debasement. While a temporary increase in real yields will put pressure on the price of gold in the short term, this will be a fleeting event given the increasing structural demand for gold from central banks accumulating hundreds of tonnes per quarter.
For the America First investor, watching as the national debt has risen to $36 trillion and two simultaneous wars are being funded while at the same time the dollar is being used as a weapon in the form of sanctions on other countries, gold is not a trade — it is insurance. And right now, that insurance is on sale.
The correction is real. The opportunity is real. The entry point is here.
