Gold Price Trends: Q2 2026 Review and Forecast

Gold, Iran and US monetary policy

In Q2, the most notable drivers of the gold price were the impact of the Iran war, the rising inflation that has complicated the Fed’s path forward and the resulting strength in the US dollar and treasury yields.

Gold’s role as a safe-haven asset came into question during the quarter — instead of rising, the precious metal didn’t react favorably to tensions in the oil-rich Middle East.

“Typically, gold does act as a hedge against geopolitical risk, a hedge against uncertainty, but I think what made this war unique is that obviously it’s tied to oil prices and energy prices, and so … the idea that energy prices are going to continue to stay higher for longer, that puts pressure on the Federal Reserve to not cut interest rates,” explained David Nicholas, co-founder of XFunds, in a mid-June interview with INN.

“The odds of a rate cut happening this year actually completely reversed after oil prices headed higher, and that led to a stronger dollar. And so all of that really put pressure on gold,” he added.

Has the Iran war permanently reversed the course of gold’s bull market? Ronald-Peter Stoeferle, fund manager at Incrementum and co-author of the “In Gold We Trust” report, doesn’t think so. While the conflict’s escalation into a stalemate has caused the yellow metal to reverse course, Stoeferle believes the gold market was due for a healthy correction, and this latest downturn is a normal part of a structural bull market and represents a buying opportunity.

“I think the market was looking for an excuse, and I think that the whole Iran war was basically an excuse for that, for taking profits,” he told INN in a late May interview.

“My view is that after this big run up, we have to find some sort of a new price equilibrium. I think for gold it’s between US$4,000 to US$4,300. That’s where we want to be aggressive buyers.”

In the last few weeks of the quarter, the focus for gold buyers has shifted from the changing battle lines of the Iran war to the direction of central bank monetary policy.

“Gold itself turned away from geopolitics per se and started looking at everything through the prism of rising interest rates, and that’s been the most recent factor to keep it under pressure,” Rhona O’Connell, StoneX’s head of market analysis, EMEA and Asia, explained in an INN interview in late June.

O’Connell understands why a fall from more than US$5,500 to around US$4,000 would have gold market watchers “scratching their heads.” She believes there are several pieces to the puzzle. One is simply that by early in the first quarter of the year, the gold market had become “too crowded,” with buying “way overdone,” so once the price did start coming down there were many speculators with stop loss orders who had to exit.

Another factor she discussed was “the meltdown in equities” as the looming threat of higher-for-longer interest rates and rising bond yields pressured the broader stock market.

O’Connell also attributed gold’s steep fall this quarter to a shift in the metal’s role as a safe-haven asset for uncertain times to an easily liquidated means for mitigating risk in other areas of an investor’s portfolio.

“The question that I and my peer group have to parry on a regular basis is, if (gold is) a safe haven, why isn’t it going up when everything else is in trouble? And the answer is because it’s an insurance policy,” she said.

“It’s the one asset which is no one else’s liability, or at least the one currency that is no one else’s liability, because it’s international and it’s not issued by a specific central bank. It’s very liquid.”

Gold ETF outflows slow from previous quarter

Investors stepped away from gold exchange-traded funds (ETFs) in March as the price fell, and while their flight continued into the second quarter, it didn’t happen at the same pace.

Kelvin Wong, senior market analyst at OANDA, shared data from the World Gold Council (WGC) with INN via email, outlining that cumulative net flows from North American and European gold ETFs totaled -94.44 metric tons this past March. While the month of April saw net cumulative inflows of 32.91 metric tons, the decline began again in May, resulting in cumulative net outflows of -7.31 metric tons, driven primarily by North America.

At the same time, WGC data shows that China and India experienced record-setting inflows during the first four months of 2026; however, both nations reversed into sharp, profit-taking outflows in May.

Joshua Rotbart, founder of global precious metals bullion firm J. Rotbart & Co., told INN via email correspondence that global gold ETF net outflows in March were valued at US$12 billion.

This figure includes US$13 billion that exited North American funds.

While renewed demand from North America and Europe helped push global gold ETF to net inflows of US$6.6 billion in April, the following month posted around US$2 billion in global net outflows.

“So far, Q2 looks more mixed than one-directional, likely influenced by the uncertainties in the gulf, and their implications for global energy and supply chains,” said Rotbart.

“So the better reading is that Q1 was a sharp reset, while Q2 has so far looked more like a recalibration. ETF demand remains sensitive to bond yields, the US dollar and expectations for interest rates.”

CPM Group’s Christian explained that the yellow metal’s falling price was one of the reasons North American gold ETF holders liquidated their positions in the first two quarters of this year.

“(A) lot of these ETF investors are not traditional buy-and-hold physical gold and silver buyers. They are more opportunistic,” he said. “They saw the gold price rising after August (2025) and through January (2026), and they bought ETFs. They bought an enormous amount of ETFs in that five month period, and then since February, they’ve been just selling, and they accelerated their sales pace over the last two weeks, partly because the price was falling, partly because the stock market was rising and partly because the economy looked better than they had expected.”

The gold market’s east/west divide

The east/west divide in the gold market is mostly cultural and extends beyond ETFs into bars, coins and jewelry.

“The growing east-west divide in gold demand is primarily driven by differing perceptions of gold’s role in wealth preservation,” Wong told INN. “In Asia, particularly in China and India, gold is widely viewed as both money and a long-term store of value, driving strong demand for physical bars and coins amid concerns over currency depreciation, economic uncertainty, property market weakness and geopolitical risks.”

Rotbart echoed that sentiment, explaining that across the east, including much of Southeast Asia and the Middle East, there are “cultural legacy reasons” for owning gold.

“Asians have bought gold for decades, whether to protect their money, or as gifts and heirlooms. When uncertainty rises, buyers take the metal home: physical bars and coins, held for years,” he told INN.

As for western investors, both precious metals experts agree that their tendency is to treat gold as a financial asset or a liquid position to trade. North American investors in particular are more focused on gaining exposure to gold via exchange-traded products, futures and mining stocks. In this way, interest rates, US dollar strength, equities performance and market sentiment have a larger impact on investor decisions to buy or sell.

As an example, Rotbart pointed to Q1 2026 data from the WGC that shows global bar and coin demand rose 42 percent year-on-year to 474 metric tons, with Mainland China up 67 percent to a record 207 metric tons, and India pulling off its strongest first quarter since 2013 with a 34 percent bump to 62 metric tons.

In comparison, US-listed gold ETFs recorded record outflows of 85 metric tons in March, erasing the 69 metric tons that flowed in earlier in the first quarter. As Rotbart commented, “Same metal, same price, opposite decisions: Asian savers accumulating physical gold, western funds trimming paper.”

Wong demonstrated the east/west divide further by highlighting regional trends in central bank gold reserve accumulation. “In addition, aggressive gold purchases by emerging market central banks have reinforced physical demand in the east, resulting in a structural shift where Asian consumers and central banks are becoming the dominant drivers of global gold demand and price trends,” he explained.

Gold price forecast for 2026

What’s ahead for the gold price in the second half of 2026?

Most of the experts INN has spoken to in recent weeks share the view that the yellow metal’s outlook for the remainder of this year will be marked by volatility and resilience. Gold is not likely to test its previous record high again in 2026, but of all the precious metals it is also unlikely to lose too much more of the ground it gained in 2025.

“Looking ahead, sovereign debt concerns, geopolitical strain, policy uncertainty and continued central bank interest should remain supportive through the rest of 2026, even if prices remain volatile,” stated Rotbart.

Mykuliakm agrees. “Gold remains the most fundamentally supported metal. Central bank purchases, as well as global reserve diversification trends and persistent geopolitical uncertainty, continue to provide a solid long-term outlook,” she told INN. “However, after its powerful rally earlier in the year, gold appears to be entering a consolidation phase. Unless markets begin pricing in a more aggressive Fed easing cycle (which is extremely unlikely in the current macro environment), price gains are likely to be more muted through the rest of 2026.”

So is US$6,000 gold still a possibility by year’s end? Is US$4,000 a safe floor of support for gold?

“No, there is now a growing risk that spot gold (XAU/USD) is likely to face further weakness after it broke down below its key 200 day moving average at the start of June 2026,” explained Wong.

“(That’s) a potential major technical deterioration of its prior major uptrend phase from the October 2023 low, supported by firmer US treasury yields and the US dollar that increases the opportunity cost of holding gold.”

Wong noted that the US Dollar Index broke above major 12 month resistance of 100.54 after the June 18 Fed rate decision made under hawkish new leader Warsh. A stronger greenback makes purchasing gold more expensive for non-US buyers as the yellow metal is globally priced in US dollars.

Christian also sees the potential for the gold price to fall further in the short term.

“We’ve been saying that we thought that the price would consolidate in a very volatile range between April and through August, and the range so far has been US$4,065 (for the week of June 8), and say US$4,900,” he said.

“The potential is for it to spike down and actually touch US$4,000, or even go down to US$3,800, which is where a lot of technical people are looking,” he explained, adding he views that as “a reasonable bottom.”

Christian said CPM Group believes the gold price will move sideways for much of the summer months before moving higher in the last four months of the year: “These are very volatile markets and very volatile and economically uncertain times, and investors are flopping around back and forth.”

Various factors are at play that could take gold back up to US$5,000 in 2026, he said, including the possibility of a US recession later in the year. However, investors will most likely be taking cues from the Fed as we move deeper into 2026. As of June 30, CME Group’s (NASDAQ:CME) FedWatch tool showed analysts factoring in a 67 percent probability that the Fed will raise rates as early as the September 15 to 16 meeting.