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Will gold prices fall to $3,800 as the precious metal remains under pressure?
Though long-term outlook for gold has not been undermined by recent sell-off, its performance will depend on the military conflict in the Middle East and how Fed responds to inflation
- PUBLISHED: Tue 24 Mar 2026, 11:57 AM
[Editor's Note: Follow Khaleej Times live blog amid US-Israel-Iran war for the latest regional developments.]
Gold prices could come under further pressure in the coming weeks and drop by around 10 per cent to $3,800, as expectations for interest rate cuts by the US Federal Reserve weaken amid ongoing regional military conflict in the Middle East.
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The precious metal was trending down on Tuesday morning, trading at $4,362 per ounce, down nearly one per cent at 10am UAE time. It is down more than 17 per cent from late last month, when it was trading at $5,300 per ounce.
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In the UAE, the 24K gold price is down more than Dh100 per gram month to date.
The prolonged military conflict involving the US, Israel and Iran has raised inflation risks through an oil price shock, reinforcing the Federal Reserve’s “higher-for-longer” stance. Additional pressure came from fund flows, with gold ETFs seeing significant outflows of approximately $7.9 billion, signalling active profit-taking and position reductions.
Will gold hit $4,800 or $3,800?
Rania Gule, senior market analyst at xs.com, said precious metals markets are currently at a pivotal stage, characterised by elevated uncertainty and conflicting investor expectations between a strong bullish scenario and a sharp correction.
“This phase cannot be assessed solely through technical analysis or short-term price movements; it must be viewed within a broader macroeconomic framework that includes central bank policies, inflation trends, the strength of the US dollar, and investor behaviour toward safe-haven assets. This complex interplay makes the projected levels – whether $4,800 or $3,800 for gold – not just numbers, but critical tests of trend strength,” she said.
Gule added that gold continues to maintain strong structural bullish momentum, but this momentum does not move in a straight line, as it can often be interrupted by sharp corrections that are necessary to rebuild long positions. “Therefore, expectations of a direct move toward $4,800 within a short timeframe, such as one week, reflect excessive optimism unless driven by an exceptional catalyst, such as a severe financial market downturn or a major geopolitical escalation.”
Catch-22 situation
At the same time, she noted that a correction toward $3,800 cannot be ruled out, especially if pressures from rising bond yields or a stronger dollar persist—both of which negatively affect gold’s appeal. “Such a scenario does not necessarily signal a shift to a bearish trend; rather, it may provide an opportunity for investors to reposition and build long-term holdings at more attractive levels. Therefore, the $3,800 level is not the end of the bullish trend, but a potential rebalancing zone within the market,” she added.
According to Jakub Rochlitz, market analyst at investment and social trading company eToro, the precious metal is currently caught between two opposing forces.
“While geopolitical tensions support demand for safe-haven assets, the inflationary impact of rising energy prices is driving expectations of higher interest rates, which is weighing heavily on gold. What we are seeing resembles a classic liquidation phase, with investors taking profits after last year’s strong rally and repositioning in response to changing macro conditions. In the near term, volatility is likely to remain elevated as markets adjust to these dynamics,” he added.
