The price of gold could be poised to bounce back to new all-time highs later this year, despite a sell-off in precious metals sparked by the Iran War.
That’s the prediction of the deVere CEO, Nigel Green, who said the long-term structural supports for the yellow metal remain in place.
Speaking on Friday, March 20, Green described the sell-off, which saw gold plummet by more than 10 per cent, as a “short-term” event, and said gold could soon rebound.
The finance chief said demand for gold from central banks is at its highest level since the 1960s, de-dollarisation remains a long-term trend, and investors continue to value gold as a reliable store of value.
These catalysts have seen gold soar from around $2,000 per troy ounce at the start of 2024 to a peak of over $5,500 in January of this year.
Gold was trading above $5,000 before the outbreak of the Iran war, which has been dollar positive and weighed on the gold price.
But Green believes that dynamic could be short-lived, and that signs of de-escalation in the conflict could propel gold to new record highs.
Why Have Gold Prices Fallen?
On Friday, March 20, gold was trading around $4,660, after tumbling from pre-war levels of around $5,200.
The rout surprised some, who expected that the war would drive a flight toward safe-havens.
Historically, gold tends to perform well when the dollar is weak, and can struggle during times of a strong dollar.
The Iran war has proved to be dollar positive, largely because it has caused a spike in the price of oil.
Because oil is traded in dollars, higher oil prices drive demand for dollars and threaten to push up inflation. That threat has caused traders to price out rate cuts until December at the earliest, making dollar assets more attractive.
Gold is a non-yielding asset, making it less attractive when interest rates are higher. Speaking to Bloomberg this week, Bart Melek said the gold rout was “an interest rate and oil story”, telling the outlet:
“People are worried we will get slower growth and inflation, with the Fed and others tightening policy.”
It echoes the view of Adrian Ash, a researcher at BullionVault, who told Barron’s that it was “bad for gold” that “Fed rate cuts have been pushed out further in the future.”
How The Gold Price Could Rebound
Right now, gold and precious metals more broadly are struggling against a strong dollar headwind.
But gold bulls say the fundamentals which have seen gold prices more than double over the past three years, remain in play.
They argue that once tensions around the Iran war subside, and energy prices begin to cool, momentum could get behind gold and propel it to new all-time highs.
That’s because those fundamentals look long-term and structural, rather than temporary or transient.
While the greenback may be riding high right now, that is contrary to US government objectives and the long-term trend.
Although the White House purports to hold to a strong dollar policy, the reality is that the Trump administration believes a strong dollar is an obstacle to American exports and is to blame for the country’s trade deficit.
But whatever the policy in the White House, or indeed at the Federal Reserve, the process of de-dollarisation will be difficult to arrest, whoever sits in the Oval Office or at the Fed.
That process, or objective, as it is in the view of many countries, would see the US dollar replaced as the world’s reserve currency, in much the same way that the dollar displaced the pound in the 20th century.
Dollar dominance has been in decline for decades, with dollars steadily falling as a share of global bank foreign reserves since the turn of the millennium.
That trend was turbocharged following Russia’s invasion of Ukraine – US sanctions on Russia revealed the extent to which countries dependent on the dollar could be put under the kibosh by Washington.
As a result, Russia, China and aligned nations have redoubled their efforts to diversify from the US dollar, and central banks the world over have embarked on a historic gold-buying spree.
The CEO of the deVere Group, Nigel Green, has described the trend as a “strategic shift” resulting from “growing discomfort with the idea of the dollar being used as a political instrument.”
In other words, the genie is not going back in the bottle, the long-term trend is away from dollar dominance, and toward continued gold accumulation.
This dynamic can fuel the debasement trade, whereby investors buy gold in order to hedge against devaluation. In recent months, the debasement trade has been among the most important drivers of the gold rally, as investors piled into the precious metal as a reliable store of value.
Nigel Green believes that when tensions cool around Iran, the long-term trends will re-enter the spotlight, potentially sparking a sharp recovery for the yellow metal:
“As tensions linked to Iran begin to ease and markets stabilise, capital will rotate back into gold rapidly. The scale of central bank buying means the upside move could be sharp.
“Fresh all-time highs are well within reach in the near term. The structural drivers are stronger than at any point in decades.
“Many emerging countries are rebuilding reserves with gold at the centre. As reliance on the dollar gradually declines and geopolitical uncertainty remains elevated, gold’s role only becomes more important.
“Once the immediate geopolitical pressures in the Middle East fade, the next move higher is likely to be bullish, fast and decisive for gold prices.”
It’s a view shared by Cosmo Sturge at Baker Steel, who told The Telegraph this week: “This will be a temporary headwind for gold.
“The core reasons for holding gold have been strengthened by this conflict. I think we will see a pretty strong rally for gold and gold miners coming out of this conflict.”
How High Will Gold Go in 2026?
At the beginning of the year, analysts were leaning bullish on gold, largely predicting the rally would continue to run, although potentially at a slower pace than in 2025.
The Iran war has altered the outlook somewhat, upending assumptions about interest rate cuts, with traders now pricing out a Fed cut until December at the earliest.
The inflation threat and the prospect of rates staying higher for longer have been blamed for the recent sell-off in gold, and may have lasting impacts.
However, bulls believe the conditions are right for a rebound in gold and believe the long-term dynamics remain in place.
Almost all recent published price targets come from the days before the outbreak of the Iran war, and show many analysts believe gold was on course to make substantial gains this year.
Among them were strategists at JP Morgan, who on February 25 raised their year-end gold price target to $6,300 per troy ounce.
In a client note seen by Reuters, the bank cited a “paradigm shift” away from the dollar as a reserve currency and “significant investor diversification” as key catalysts.
Data aggregated by the outlet showed a number of institutional investors forecasting gold at or around $6,000 by year-end, including UBS and Deutsche Bank.
However, on the lower end, ANZ called for gold to trade around $4,400 by year-end and HSBC was forecasting $4,450.
In a report published on February 26, just two days before the outbreak of the Iran war, ING’s commodities strategist Ewa Manthey said that “Momentum may moderate from here. But the structural drivers underpinning the market remain firmly in place – and in some cases are strengthening.”
Manthey cited five key catalysts for gold: central bank demand for gold, geopolitical tensions, Fed easing, ETF inflows and the growth of stablecoins.
As aforementioned, it is worth noting Fed easing, a key upside risk for gold, no longer looks likely this year; however, many of the other supports are likely to continue giving.
In a March 16 report, one of the few published after the commencement of hostilities in the Middle East, the CRU Group said gold could peak at $6,000 this year.
In an interview with Kitko, CRU Group vice president Frank Nikolic said: “I think gold has structurally repriced itself…
“We do see prices going up next year, even peaking… and then starting to stabilise just shy of $6,000,”
Why Gold Could Come Back Stronger After the Iran WarThe Iran war has complicated what was, at the start of 2026, a relatively clean bull case for gold. The structural tailwinds remain, but the conflict has thrown up a number of headwinds which have seen the yellow metal fall by more than 10 per cent.
Roughly three weeks into the Iran war, soaring crude and gas prices are raising inflationary risks and making rate cuts by the Federal Reserve and other central banks less likely, a direct headwind for non-yielding assets like precious metals.
While gold often rallies amid turmoil, the Iran war has proved dollar positive at gold’s expense. Summing up the dynamic, ING analysts said in a recent note:
“Growing concerns over the global economic fallout from the conflict are weighing on risk appetite.
“The spike in oil prices has added to inflation concerns, reducing the likelihood of a near-term US rate cut and creating headwinds for both industrial and precious metals.”
The bull case for gold remains clear, however. JP Morgan’s head of Global Commodities Strategy, Natasha Kaneva, has argued that “the long-term trend of official reserve and investor diversification into gold has further to run”, and the bank stands by a $6,300 year-end target.
Deutsche Bank has reiterated its own $6,000 forecast, citing persistent investment demand amid de-dollarisation.
According to analysis by JP Morgan, Private wealth allocations to gold remain about 50 per cent below levels seen a decade ago, suggesting there is still, potentially, considerable room for demand to grow.
However, it’s no sure thing that gold will bounce back, and bears believe prices are frothy after what some have dubbed a “speculative frenzy.”
This, combined with a radically new outlook for interest rates, may spell medium-term pressure for the yellow metal.
That said, institutional investors have not so far moved to downgrade their gold price forecasts, even as a sell-off ensues, indicating, for now, they are sticking to their guns.
Source: Mario Laghos Devere-group.com
