Steve Rand
General Manager / Sr. Precious Metals Advisor
Steve Rand is the General Manager and a Sr. Precious Metals Advisor at Scottsdale Bullion & Coin. He brings over 20 years of experience in the physical precious metals markets.
Brian Conneely
Sr. Precious Metals Advisor
Brian Conneely is a Precious Metals Advisor at Scottsdale Bullion & Coin. He's worked in the precious metals market since 2009, trading commodities and futures before moving into physical gold & silver investing.
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Following six months of sideways movement, gold prices notched their highest point in more than two months. Short-term headwinds are starting to wane while foundational tailwinds remain strong. At this point, many investors are wondering what factors could support or stymie gold.
In this week’s The Gold Spot, Scottsdale Bullion & Coin’s Sr. Precious Metals Advisors Steve Rand and Brian Conneely explore gold’s potential reversal to the upside, why major institutions are predicting $5,000+ gold in the near future, and what could drive the next rally or thwart it.
Gold Spot Prices Reach Highest Point in Two Months
Earlier this week, gold prices rose over $4,400/oz for the first time in about two months. Within a month, the metal is up around 10% from below $4,000/oz in mid-July.
Once again, gold is within positive territory year-to-date, a position it’s struggled to maintain since falling from a recent all-time high in late January 2026. Analysts attribute this meaningful reversal to two primary catalysts:
Weak Jobs Report
On August 7, the Bureau of Labor Statistics reported in its July jobs report that the economy experienced an unexpected loss of 23,000 jobs. Alarmingly, economists had anticipated an 80,000 rise in employment, resulting in a 103,000-job deficit.
At the same time, the jobs data for prior months were revised down. These shifts immediately lowered expectations for another Federal Reserve rate hike, helping to clear the way for a gold pop. Higher rates tend to weigh on safe-haven demand as these assets, like gold and silver, offer no yields.
Strong Chinese Demand
Meanwhile, the People’s Bank of China completed its 21st straight month of gold buying. Since November 2024, China has added to its physical reserves, which now stand at 2,366 metric tons. This surge in gold buying further added momentum to spot prices.
U.S. gold reserves still far outpace those of China, but America’s holdings have stagnated over the past few years. Meanwhile, the PBOC, along with many emerging-market central banks, has dramatically and consistently increased demand for physical gold bullion.
The combination of lower odds of a rate hike due to worsening domestic macroeconomic conditions and persistent central bank gold buying, led by Asia, has propelled gold to a two-month high. While neither development guarantees what happens next, many people are starting to wonder if this rebound means the correction is over.
“The momentum has definitely shifted noticeably from where it was just a few weeks ago. The question everyone is asking simply right now is, where is the bottom?”
Steve Rand
General Manager / Sr. Precious Metals Advisor
Is Gold’s Correction Finally Ending?
Gold has shed over $1,000/oz since climbing to a record peak at the beginning of the year, so even a 10% bump cannot automatically signal a bullish reversal. However, what makes this rebound more compelling is what happened throughout the prolonged correction.
Market strategist Stephen Innes argues that gold’s correction may have accomplished exactly what healthy corrections are supposed to do: flush out speculative excess without destroying the broader bullish setup. Several independent market indicators support that interpretation:
Speculative Investors Were Flushed Out
Every asset rally attracts speculative traders looking to capitalize on volatile growth, and the multi-year gold boom was no exception. Yet the bright side of a correction is that short-term investors tend to get shaken out.
The World Gold Council (WGC) recently reported that COMEX open interest had fallen by more than 1,000 tonnes since mid-January, briefly reaching levels not seen since 2009. The organization says this may indicate that some of the speculative excess built up during gold’s earlier run has been flushed out, potentially leaving the market on firmer footing for another advance.
Gold’s Long-Term Bull Case Remained Intact
From a chart perspective, gold prices have lost momentum over the past few months, falling below their 200-day moving average. Still, this technical damage hasn’t destroyed gold’s long-term case.
In June, the WGC reported that gold was one of the strongest-performing major assets over the prior 12 months. Even as prices corrected, many of the fundamental forces behind gold’s broader rally remained intact, strengthening the case that the downturn represented a temporary reset rather than the end of the bull market.
Central Banks Loaded Up Regardless of Prices
Central bank demand remains one of the central pillars of gold’s extended performance. Notably, official buyers remained active during the correction, not despite lower prices, but because of the opportunity the market downturn represented.
The PBOC may be stealing the headlines, but central bank gold purchases jumped 411% between Q1 and Q2 2026, according to the WGC. Central banks remain on track to maintain the roughly 1,000-tonne annual buying pace they’ve sustained for the past four years.
Dry Powder Could Cause Explosive Growth
Gold is already showing signs of recovery even as many financial investors remain on the sidelines. That makes the rebound especially constructive, since a meaningful pool of capital could still return to the market if momentum continues building.
COMEX open interest remains well below its January levels. Meanwhile, North American gold ETFs recorded their weakest first half since 2013. If these investors begin rebuilding exposure, that renewed demand could provide additional fuel for a larger advance.
“The correction looks like it's turning into a recovery. And it's not just the numbers, but the sentiment itself feels like it's shifting. And we're seeing the evidence.”
Steve Rand
General Manager / Sr. Precious Metals Advisor
Major Institutions Still See $5,000+ Gold
Gold’s correction between January and June was significant, but the relatively promising setup outlined by Innes helps explain why some of the world’s largest financial institutions remain bullish on gold.
Many 2026 gold price forecasts remain far above current levels, and more major banks are calling for increased movement in the long run, too. Here are just a handful of the banks projecting gold prices at $5,000/oz and beyond:
🏦 UBS: $5,000 in H1 2027
UBS expects gold to reach roughly $5,000/oz in the first half of 2027, citing falling real rates, a weaker U.S. dollar, persistent federal deficits, and durable central bank demand.
📈 Metals Focus: $5,000 by Year-End 2026
Metals Focus sees a path to $5,000/oz by the end of 2026, supported by a softer Federal Reserve outlook and stronger physical gold demand from India.
🏦 Citi: $5,000 in 2027
Citi sees gold reaching $5,000/oz in 2027 as diversification demand and macroeconomic hedging continue to support the metal.
🏦 RBC: Bull Case Around $5,300 in 2027
RBC Capital Markets’ conservative case keeps gold above roughly $4,200/oz through 2027, while its bullish scenario has gold prices averaging around $5,300/oz.
🏦 Wells Fargo: Up to $6,000 in 2027
Wells Fargo Investment Institute projects gold at $5,300–$5,500 by year-end 2026 and $5,800–$6,000 by the end of 2027.
While nobody can predict the metal’s price movement perfectly, some of the top banks say gold’s downside risk is running out of room. The flip side of that development is greater potential for upward action.
“There's no agreement on the exact timing or path, of course, but $5,000 gold has gone from a fringe idea to a mainstream institutional forecast. And that is a real shift.”
Steve Rand
General Manager / Sr. Precious Metals Advisor
SUGGESTED READINGWhat Could Drive Gold to $5,000/oz Again?
Banks point to a convergence of several bullish forces that could help propel gold prices toward $5,000/oz and beyond.
Lower Rates and Falling Real Yields
UBS expects the Fed to hold rates steady through the rest of 2026 before resuming cuts in 2027. Lower real yields would reduce the opportunity cost of holding non-yielding assets, such as gold. Generally speaking, as interest rates stagnate or decline, safe-haven demand rises.
A Weaker U.S. Dollar
UBS also points to the mountainous national debt, which is just days away from reaching $40 trillion, expanding federal deficits, and broad mistrust of American-centrism in the economy as direct threats to the value of the USD.
As the greenback weakens, official investors have increasingly turned away from the world safe-haven in favor of gold through a process of de-dollarization. At the same time, a comparatively lower-valued dollar makes gold cheaper for foreigners.
Persistent Central Bank Demand
It’s challenging to overstate the impact that central bank purchasing has on gold prices. Not only are these official buyers one of the largest centralized sources of demand, but they also set monetary policy and the broader economic tone.
A recent survey found that 45% of central banks plan to boost their gold reserves over the next year. Additionally, South Korea purchased gold for the first time in 13 years, reflecting a foundational shift in the global financial system.
What Could Still Derail Gold’s Recovery?
Understanding what could derail gold’s recovery is just as important as recognizing the forces that could drive the next rally. Here are some of the key headwinds that could stand in gold’s way.
- Higher Rates and Yields: A more hawkish Fed or rising real yields could increase gold’s opportunity cost and pressure prices.
- A Stronger Dollar: Dollar strength could make gold more expensive for foreign buyers and pull capital toward U.S. assets.
- Risk-On Sentiment: Stronger growth or easing geopolitical tensions could shift investors away from safe-haven assets and toward stocks.
- Technical Breakdown: A failure to hold key support levels could undermine the rebound and trigger another leg lower.
Has Gold’s Correction Finally Run Its Course?
It’s anybody’s guess when gold prices reach their next bottom, but the metal’s chart patterns and macroeconomic backdrop look much stronger than they have throughout this recent correction. Over the past few months:
- Momentum has been building.
- Speculative traders have been flushed out.
- Central banks, especially in Asia, remain persistent.
At the same time, the economic picture is souring as national debt soars, interest costs balloon, the dollar loses its safe-haven grip, and central banks struggle to manage monetary policy. This systemic fiscal decay only reinforces the long-term case for owning physical gold and silver. A growing number of analysts seem to agree, with some of the biggest names calling for $5,000+ gold.
The key question is no longer whether gold immediately returns to its previous highs, but whether the recent correction broke the broader bull case or reset the market for its next move. For long-term investors, gold continues to serve its primary function as a wealth protector, no matter where prices head next.
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