Gold Prices Fall Sharply, But Analysts See Key Support Levels
NEW YORK – Gold prices experienced a critically important drop last week, halting a months-long rally, but analysts suggest key support levels could prevent further substantial declines.The price of gold had risen 28% since mid-August, fueled by central bank buying, inflows into gold ETFs, adn investor hedging against trade tensions and currency depreciation.
The recent pullback has sparked debate among analysts regarding the sustainability of the previous gains. some question whether the conditions driving the rally have always been in place. Precious metals volatility has notably increased, with options trading linked to the world’s largest gold ETF exceeding 2 million contracts on both last Thursday and Friday – setting new records.
Despite the recent downturn, Wall Street remains largely optimistic about gold’s long-term prospects. Bank of America analysts recently reiterated a “buy gold” recommendation, forecasting a peak price of $6,000 per ounce by mid-2026. Goldman Sachs raised its 12-month gold price target from $4,300 to $4,900, while JPMorgan Chase anticipates $6,000 per ounce in 2029.
Though, Tatiana Darie, a macro strategist at Bloomberg, cautioned that current gold ETF holdings haven’t yet reached historical highs, suggesting the rally could have further to run, but also warning that momentum will eventually fade. She noted that upcoming U.S. economic data, if showing stronger-than-expected growth, could trigger a more substantial price retreat.
Maximilian Layton of Citi Research anticipates a period of consolidation over the next 2-3 weeks, potentially driven by the end of the U.S. government shutdown and the agreement between the U.S. and China. Citigroup maintains a gold price target of approximately $4,000 per ounce, a level Layton described as less “aggressive” than previously.
Michele Schneider, chief strategist at MarketGauge, stated that a significant and sudden reduction in U.S. debt, or the arrival of global peace, would be necessary to truly reverse the upward trend in gold prices.
