Despite a recent sell-off triggered by fresh Middle East geopolitical tensions, which have fueled sharp inflation increases and even "stagflation" fears across markets, upending expectations for interest rate cuts, major Wall Street financial institutions assert that gold retains strong potential for a significant rebound to new record highs over the long term. Analysts from firms including Wells Fargo, JPMorgan, ANZ, and Goldman Sachs Group suggest that the current price trajectory for gold resembles a restorative bullish path, reflecting an unbroken long-term bull market logic where bulls are reclaiming pricing power following a short-term deep retreat. They emphasize that post-conflict currency depreciation, persistent inflation risks, and escalating fiscal deficit pressures continue to serve as long-term structural tailwinds for gold.
Wall Street analysts broadly agree that resilient demand from the People's Bank of China and other global central banks, the potential for prolonged geopolitical uncertainty, a possible revival of expectations for Federal Reserve rate cuts, diversification away from US dollar-denominated assets, and safe-haven demand stemming from fiscal dilemmas in developed markets are core reasons underpinning a positive long-term outlook for gold. Since the outbreak of conflict in the Middle East in February, spot gold prices have declined nearly 10% from the record high above $5,500 per ounce set in January. Rising US Treasury yields, a strengthening US dollar amid crushed expectations for Fed easing, and conflict-related volatility have prompted some investors to increase cash holdings. However, analysts anticipate gold prices will ultimately stage a substantial recovery, particularly as a deteriorating macroeconomic environment of growth and inflation paves the way for central banks globally to resume rate cuts, which would significantly boost gold.
Although gold may face continued short-term pressure from liquidity shocks, speculative position unwinding, rising real interest rates, and fluctuating policy expectations, its underlying long-term bull market logic remains intact. Over the next 12 months, gold still possesses the conditions to strengthen further and potentially challenge new highs. On one hand, gold's failure to consistently act as a traditional safe-haven asset during the initial crisis phase does not signify a loss of its safe-haven attributes; more accurately, gold is often sold initially as a highly liquid asset during market panics to meet margin calls and cash needs. On the other hand, the current pullback bears clear technical and positioning characteristics: previously, gold prices, ETF holdings, and market sentiment were at historically elevated levels, making them susceptible to a liquidity-driven correction focused on "valuation compression and deleveraging" after the conflict erupted.
The long-term bullish thesis for gold remains very robust. With gold stabilizing around $4,700, is a new bull run imminent? The current situation appears more like a tactical retreat within a bull market, triggered by liquidity, interest rates, and positioning factors, rather than a reversal of the long-term upward trend. Structural forces supporting a future price recovery remain solid: continued central bank purchasing provides a floor, dollar credit concerns and high-debt environments strengthen allocation demand, while geopolitical and stagflation risks enhance gold's appeal as a store of value.
Analysts Soni Kumari and Daniel Hynes from ANZ wrote in a recent research report that a worsening growth-inflation mix will largely pave the way for central banks to restart rate cuts. ANZ maintains its outlook, forecasting gold to reach $5,800 per ounce by year-end. Spot gold hovered near $4,750 recently, having stabilized above the technically significant $4,700 level and poised for a third consecutive weekly gain. A US-Iran ceasefire agreement triggered a sharp drop in oil prices, alleviating concerns about resurgent inflation and potential Fed rate hikes, while a softer US dollar also supported gold. Investors are turning their attention to diplomatic talks between the US and Iran in Islamabad this weekend, led by US Vice President Vance.
ANZ analysts noted that global central bank gold buying is expected to remain a key support and bullish pillar, with official sector purchases projected around 850 tonnes in 2026. ANZ's bullish stance follows similar optimistic calls earlier in March from Goldman Sachs, RBC Capital Markets, Wells Fargo, and JPMorgan. Goldman Sachs maintains its year-end target of $5,400 per ounce, citing ongoing central bank buying and its expectation for the Fed to cut rates by 50 basis points this year. However, Goldman analysts Lina Thomas and Daan Struyven noted in a March 31 report that if negative supply disruptions in the Strait of Hormuz persist, gold and silver face short-term tactical downside risks. Nevertheless, prolonged geopolitical conflict could accelerate diversification away from traditional Western financial assets, supporting gold prices long-term.
The long-term upward trend for gold prices is likely far from over, and "setting a new record high this year" is a substantial mainstream Wall Street forecast scenario. The bullish logic is clear: persistent central bank buying, geopolitical uncertainty, diversification from dollar assets, and—should the growth-inflation dynamic worsen—falling real rates, combined with global fiscal pressures and sovereign bond credibility issues, could comprehensively reinforce gold's medium to long-term allocation value.
Many veteran market analysts insist the structural logic supporting gold has not broken down or changed. Fidelity International portfolio manager George Efstathopoulos stated this pullback represents a significant buying opportunity, noting that inflation risks, fiscal pressures, and bond credibility issues in developed markets like the US and Japan remain long-term structural tailwinds for gold. JPMorgan maintains a bull market target of $6,300 per ounce by end-2026, while the Wells Fargo Investment Institute significantly raised its year-end target range to $6,100–$6,300, both notably above January's record high of $5,594.82.
Initially, the Iran conflict pushed fears of higher oil prices, inflation, and "higher-for-longer" benchmark rates to the forefront, causing non-yielding assets like gold to face liquidity selling and rate pressure. However, as markets begin to price in economic slowing, falling bond yields, expanding fiscal deficits, and the return of safe-haven allocation strategies, gold is regaining support. Furthermore, gold's weakness during this US-Iran conflict mirrors its historical performance in early stages of geopolitical wars—often declining initially before rising. Bank of America strategist Michael Hartnett, noted for accuracy, recently suggested that "policy panic" from a Trump administration is highly probable to avert recession. Under this premise, he views the best trade themes as long positions on yield curve steepening and consumer stocks. Simultaneously, as a loss of presidential credibility often accompanies a dollar bear market and amid fiscal expansion in developed markets (especially larger European defense/energy spending and Japan's massive debt), bullish trends for gold and international equities are expected to return opportunistically.
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