E-Paper
Sign In
Gold eyes $6,000 as global banks back next leg of rally
For a non-yielding asset like gold, the prospect of higher-for-longer interest rates presents a clear near-term headwind, analysts say as metal pulls back below $5,000
- PUBLISHED: Thu 19 Mar 2026, 8:39 PM
Gold’s sharp pullback below the $5,000-an-ounce mark has done little to dent growing conviction among global banks and analysts that the precious metal is merely pausing before its next major advance — with forecasts increasingly clustering around the $5,800–$6,000 range over the coming year.
After surging to a record high near $5,600 in January, gold has retreated to around $4,850–$4,900, marking a multi-session decline driven by a stronger US dollar, rising bond yields and hawkish signals from the Federal Reserve. The correction has been amplified by hotter-than-expected US inflation data, with producer prices rising 0.7 per cent in February, reinforcing expectations that interest rate cuts may be delayed.
Recommended For You
For a non-yielding asset like gold, the prospect of higher-for-longer interest rates presents a clear near-term headwind.
Analysts argue that the recent weakness reflects a cyclical pause rather than a structural reversal. “Gold is consolidating after an extraordinary run, but the underlying drivers remain firmly intact,” said a commodities strategist at a leading global bank. “This is a reset, not the end of the bull cycle.”
In Dubai, the global recalibration is clearly visible. 24K gold prices are currently hovering around Dh600–Dh605 per gram, easing from peaks above Dh630 earlier this month and highs near Dh650 at the start of March. The softer prices have triggered renewed retail demand, with jewellers reporting steady buying from residents and tourists seeking to capitalise on the dip.
The divergence between gold’s recent weakness and rising geopolitical tensions is notable. Despite escalating conflict in the Middle East and oil prices climbing above $110 per barrel, gold has not delivered its typical safe-haven surge. Instead, investors have rotated into the US dollar and energy markets, reflecting a shift in focus toward inflation-driven trades.
“Higher oil prices are reinforcing inflation expectations, which in turn is supporting the dollar and yields — both negative for gold in the short term,” analysts at Goldman Sachs noted, highlighting the complex interplay between commodities and monetary policy.
However, beneath these short-term pressures lies a powerful structural narrative that continues to support gold’s long-term outlook.
According to CRU Group, gold’s dramatic rally from around $2,000 to over $5,500 in just over a year represents a fundamental repricing of the metal within the global financial system. The move reflects mounting concerns over sovereign debt, currency debasement and the credibility of monetary policy frameworks.
“The way to understand gold today is through confidence — or the erosion of it,” said Frank Nikolic, vice president at CRU Group. “We are seeing a structural shift in how investors value gold as a monetary asset.”
This shift is being reinforced by a rapidly changing macroeconomic backdrop. Global debt levels are at historic highs, geopolitical fragmentation is intensifying, and central banks are navigating a delicate balance between controlling inflation and sustaining growth.
CRU’s analysis highlights the scale of gold’s long-term potential. With US broad money supply estimated at around $22 trillion and official gold reserves just over 8,100 tonnes, even partial monetary backing would imply significantly higher prices. A 20 per cent backing suggests levels near $17,000 an ounce, while full backing could theoretically push prices toward $85,000.
While such scenarios remain hypothetical, they underscore a key point: gold’s upside is increasingly driven by capital allocation decisions rather than traditional supply-demand dynamics.
Even modest shifts in global portfolios could have a profound impact. Analysts estimate that a 1 per cent reallocation of global financial assets into gold could lift prices toward $7,500 per ounce, while deeper reallocations linked to concerns over debt sustainability could push prices into five-digit territory over time.
Major global banks are broadly aligned in their bullish outlook. JPMorgan and Bank of America have pointed to continued central bank buying — particularly by emerging markets — as a critical source of support. Central banks have been accumulating gold at a record pace as they diversify reserves away from the US dollar, reinforcing the metal’s role as a strategic asset.
In the near term, however, volatility is likely to persist.
Goldman Sachs analysts note that elevated oil prices are creating a competing inflation trade, drawing capital into energy markets while simultaneously delaying monetary easing. Profit-taking and margin calls have also accelerated the recent sell-off, while exchange-traded fund flows have turned mixed, indicating a pause in institutional demand.
In Dubai, this evolving landscape is translating into more tactical buying behaviour. Retail investors are increasingly timing purchases around dips, while high-net-worth individuals continue to accumulate gold as part of long-term wealth preservation strategies.
Despite the current consolidation, CRU expects gold to resume its upward trajectory once macro headwinds begin to ease, with prices potentially stabilising near $5,800–$6,000 over the next year — in line with forecasts from several global banks.
The broader backdrop, precious metals analysts contend, remains supportive: persistent geopolitical risks, elevated global debt levels, and ongoing uncertainty around central bank policy continue to reinforce gold’s appeal. “The drop below $5,000 may appear significant, but in the context of a historic rally, it is likely a recalibration rather than a reversal,” they say.
