Gold prices plunged to a four-month low of $4,098 this week, marking the worst five-session performance since February 1983. The crash was driven by a hawkish Federal Reserve, a strong U.S. dollar, and signs of de-escalation in the Iran conflict. Despite the sharp decline, several major banks have maintained or even raised their long-term gold price targets, with some analysts projecting prices could reach $10,000 by the end of the decade based on sustained structural demand.
Gold plummeted to a four-month low earlier this week, briefly erasing all its year-to-date gains. A combination of shifting Federal Reserve policy, a stronger U.S. dollar, and reduced geopolitical tensions triggered the sell-off.
The asset’s price collapse was linked to markets interpreting rising oil prices as an inflationary shock, which drastically reduced expectations for interest rate cuts. This dynamic made non-yielding gold less attractive compared to bonds or cash, pressuring its value downward. The sell-off briefly pushed the SPDR Gold Trust below $400 in premarket trading and dragged the broader precious metals complex lower with it.
A subsequent announcement on Truth Social regarding diplomatic talks with Iran prompted a rapid rebound, with gold gaining nearly $400 from its session low within hours. The price recovered to around $4,470 by mid-afternoon in London, illustrating the market’s extreme volatility. Major financial institutions have largely defended their long-term bullish outlooks despite this short-term turbulence.
UBS carries a gold price target of $6,200 for September 2026, while Deutsche Bank and Société Générale both forecast $6,000 by year-end. J.P. Morgan stands at a target of $6,300, and its Head of Global Commodities Strategy, Natasha Kaneva, stated: “We expect gold demand to push prices toward $5,000/oz by year-end 2026.” Investment Strategist Justin Lin attributed the sell-off to short-term sensitivities but emphasized the broader supportive backdrop of geopolitical uncertainty and central bank demand.
Ed Yardeni, President of Yardeni Research, stated: “We are sticking with $10,000 by the end of the decade.” Analyst Peter Schiff drew a historical parallel, noting gold’s 32% crash in early 2008 preceded a 178% surge. Central banks purchased 863 net tonnes of gold in 2025, representing the fourth-largest annual total on record. This structural demand factor remains a key pillar for many long-term price forecasts.
