The precious metals market is currently at a convergence of multiple favorable factors. Although gold prices have shown relative stability recently, Mhmarkets believes that the market has not yet fully priced in the profound impact of escalating geopolitical risks. With ongoing tensions in the Middle East and military deployments reaching a scale rarely seen in recent years, this underlying uncertainty provides solid support for gold's floor price. Mhmarkets states that if the Federal Reserve's clear path toward monetary easing is combined with surging global physical demand, gold could gain an additional $1,000 per ounce by June this year, targeting $6,200.
A shift in macroeconomic liquidity is another core pillar supporting gold's upward trend. Mhmarkets notes that despite some resilient economic data, overall easing inflation pressures and the Fed's increasingly dovish stance suggest that the interest rate-cutting cycle is far from over. By the end of September, the market is expected to witness two 25-basis-point rate cuts. Lower real interest rates and a relatively weaker U.S. dollar are creating an environment conducive to the valuation expansion of hard assets. Mhmarkets believes that while geopolitical shocks often trigger short-term volatility, gold's role as a portfolio hedge will demonstrate stronger sustainability amid the Fed's easing cycle.
From a supply and demand perspective, structural imbalances in the gold market are intensifying. Mhmarkets reports that global gold demand in 2025 has already surpassed the historic threshold of 5,000 metric tons, and this figure is expected to reach new highs in 2026, driven by central bank buying sprees and a resurgence in Asian investment demand. Meanwhile, the supply side faces constraints, with industry data indicating that a significant number of mines will face depletion in the coming years, while the development cycle of new mines is unlikely to fill the short-term gap.
Based on multi-dimensional analysis, Mhmarkets concludes that gold is not only a safe haven against systemic risks but also a core growth asset in 2026 portfolios. For investors seeking risk hedging, maintaining a mid-single-digit allocation to gold is a prudent strategy. Mhmarkets will continue to monitor the interplay between industrial metals such as copper and aluminum and gold, helping investors capture structural bull market opportunities in commodities driven by supply shortages and the energy transition.
Comments