Gold suffered a sharp correction on Friday after Federal Reserve Chairman Kevin Warsh used his first Jackson Hole speech as Fed Chair to warn that inflation remains a concern and that the Federal Reserve may still have “work to do”.
The reaction was immediate.
Spot gold fell more than 3% at one point, reaching around US$4,567 an ounce, while December gold futures also came under heavy selling pressure. The US dollar strengthened and expectations for a possible September interest-rate increase increased significantly following Warsh’s comments.
For investors who have watched gold climb dramatically this year, the obvious question is:
Is a sharp pullback like this an opportunity to buy gold at a better price?
Gold’s rally takes a breather
Gold has had an extraordinary run through 2026, with the metal still sitting substantially higher than it was a year ago despite Friday’s sell-off.
The correction came after gold had recently pushed above US$4,700, with investors taking profits and reassessing expectations for US interest rates.
Higher interest rates can put pressure on gold because bullion does not pay interest or a yield. When investors expect rates to remain higher for longer, some money can move towards interest-bearing assets.
Warsh’s comments therefore provided a reason for investors to reduce some of their gold positions.
But this is only one side of the story.
Inflation has not disappeared
Warsh reiterated the Federal Reserve’s commitment to its 2% inflation target and indicated that recent inflation data has not convinced him that underlying inflation is improving sufficiently.
Markets responded by increasing expectations of a September rate increase. Reuters reported that expectations for a September hike rose to around 58% following the speech.
That is important for gold in the short term.
But for physical gold investors, the bigger question is what happens over the next five, ten or twenty years.
Gold is not simply a trade on the next Federal Reserve meeting.
It is also a monetary asset that investors use as protection against inflation, currency weakness, government debt, financial instability and declining purchasing power.
So, is Friday’s fall an opportunity?
For someone attempting to pick the exact bottom of the gold market, the answer is impossible to know.
Gold could fall further.
It could recover quickly.
It could move sideways for months.
Nobody knows with certainty.
This is precisely where cost averaging can be useful.
Instead of trying to determine the perfect entry point, an investor commits a regular amount of money to physical gold over time.
When prices are high, the same amount of money buys less gold.
When prices fall, the same amount buys more gold.
When prices rise again, the investor already owns the gold accumulated during the lower-price periods.
The objective isn’t to predict tomorrow’s price.
The objective is to build a physical gold position over time.
A falling price can actually help the disciplined buyer
Imagine an investor has decided to invest $500 every month into physical gold.
If gold prices rise, that $500 purchases a smaller amount.
If gold prices fall, the same $500 purchases more.
This is one of the fundamental principles behind cost averaging.
A correction can therefore be viewed differently depending on whether you are a short-term trader or a long-term accumulator.
A trader may see Friday’s fall as a warning.
A long-term physical gold investor may see it as an opportunity to accumulate more metal for the same amount of money.
Don’t try to catch the bottom
One of the biggest mistakes investors make is waiting for the “perfect” price.
The problem is that you only know where the bottom was after the market has moved higher again.
Gold could fall another 5%.
It could fall 10%.
Or Friday’s low could eventually prove to have been an attractive entry point.
There is no reliable way to know in advance.
Cost averaging removes some of that pressure.
Rather than asking:
“Is this the bottom?”
The better question may be:
“Is today’s price attractive enough for me to continue building my long-term physical gold position?”
Physical gold is different from the paper market
For FirstGold investors, it is also important to remember that the price displayed on financial markets is the wholesale or spot market price.
Buying physical bullion involves manufacturing, refining, distribution and other costs. Selling physical bullion also involves a spread between the buy and sell price.
That means investors should not expect the price of a physical one-ounce bar or coin to move exactly in line with the quoted spot price.
The important consideration is the amount of physical gold accumulated over time, rather than becoming obsessed with every short-term movement in the spot price.
Gold has already surprised the market
Perhaps the most important lesson from 2026 is how difficult it has been to predict gold.
The metal has repeatedly pushed into territory that would have seemed extremely bullish only months earlier.
Friday’s correction is a reminder that even a powerful bull market does not move in a straight line.
Large corrections are part of markets.
For long-term investors, volatility can be uncomfortable. But for disciplined accumulators, volatility can also provide opportunities to buy more metal when prices retreat.
What about silver?
Silver was hit even harder on Friday.
Spot silver fell more than 3%, with prices around US$66.81 reported during the session. Despite the correction, silver remains one of the strongest-performing precious metals over the past year.
Silver is generally more volatile than gold, which means its price movements can be considerably larger in both directions.
For investors considering precious metals, that difference in volatility is important.
Gold tends to be viewed primarily as a monetary and wealth-preservation asset, while silver has both monetary and significant industrial uses.
The FirstGold approach: accumulate, don’t speculate
Friday’s fall does not tell us whether gold will be higher or lower next week.
What it does provide is a reminder that prices can move quickly in both directions.
For investors who believe in holding physical precious metals for the long term, cost averaging can provide a disciplined alternative to trying to time the market.
Instead of waiting for the perfect price, you continue accumulating through the highs, the corrections and everything in between.
You don’t need to predict the future price of gold to build a physical gold position.
You need a strategy, discipline and a long-term view.
Is today a good day to buy?
If you are a short-term trader, nobody can guarantee that Friday’s correction was the bottom.
If you are a long-term investor using cost averaging, however, a significant pullback can be exactly the type of market movement that makes regular accumulation worthwhile.
The key is not to invest money you cannot afford to commit for the long term, and not to confuse cost averaging with a guarantee of profit.
Gold can go down as well as up.
But for those looking to steadily build their physical precious metals holdings, periods of weakness can be an important part of the accumulation process.
FirstGold — accumulate physical gold over time, rather than trying to predict tomorrow’s price.
Disclaimer: The information provided in this article is for general information and educational purposes only and should not be considered financial, investment, legal or tax advice. Precious metals, including physical gold and silver, can fluctuate in value, and past performance is not an indication of future results. Cost averaging does not guarantee a profit or protect against losses, and there is no guarantee that gold or silver prices will rise following a market correction. Investors should consider their own financial circumstances, investment objectives and risk tolerance and seek independent professional financial advice where appropriate before making any investment decision. FirstGold does not make any representation or guarantee regarding future precious metal prices or investment returns. All investment decisions are made at the investor’s own risk.
