Gold mine: will the precious metal fall indefinitely
Although the Middle East conflict is close to a truce, the Strait of Hormuz is functioning intermittently, and oil prices are keeping global inflation at consistently high levels. Gold, which should grow against the background of such instability (as it did in previous years), is rapidly falling in price, having updated its six-month lows in early June and dropped below the 200-day moving average. From the autumn of 2022 to March of this year, gold was in a phase of almost non-stop growth, reaching an absolute record near $5,600 per ounce in January. Today, the quotes are teetering on the edge of $4,000. Izvestia investigated whether this means that the status of gold as a safe haven asset is overestimated.
Everyone has gone into AI
The technical picture of the market is quite transparent. Since January, three waves of correction have already swept through gold. In February, the local minimum was at around $4,406 per ounce, in March the quotes sank to $4,100, and in early June they dropped to $4,025. The drop was almost 30%, which would be considered an absolute bear market in the equity sector.
— Each subsequent minimum was lower than the previous one. This suggests that the medium—term growing trend in gold has been broken, and investors do not like to hold assets that are losing value," notes Finam analyst Alexander Potavin.
The immediate cause of the latest collapse was macroeconomic statistics from the United States. The data on the US labor market published on June 5 turned out to be unexpectedly strong. This forced investors to finally say goodbye to the illusions about the imminent reduction of interest rates by the Federal Reserve System (FRS). The futures market has turned upside down: traders are now pricing in a 25 basis point increase in the Fed's interest rate by the end of January 2027. Major investment banks, including Goldman Sachs, have officially abandoned forecasts for monetary policy easing this year.
However, the fall in gold has a deeper, fundamental reason — a global shift in the balance of savings and investments. Previous years were characterized by an abundance of free money: investors actively played out the scenario of a long-term depreciation of fiat currencies, buying up gold and cryptocurrencies. Bitcoin, by the way, has suffered even more from the paradigm shift, falling twice from its October 2025 highs.
Bitcoin
Today, free liquidity has disappeared from the market. The development of artificial intelligence infrastructure (the construction of megawatt data centers) requires trillions of capital investments, forcing technology corporations to borrow huge amounts of money. The latest IPO of SECEX, which led to the emergence of the world's first trillionaire (Elon Musk), is the latest example of this. At the same time, governments in developed countries are increasing the issuance of debt securities to cover budget deficits. As a result, real (inflation-free) interest rates have risen to record levels over the past 15 years.
Capital flows logically to where there is profitability. Conservative investors are moving into reliable government and corporate bonds with high rates, while risk-averse players are financing the AI sector. Gold, which does not generate interest income, is simply being squeezed out of portfolios by these two powerful magnets.
Central banks: tactical pause or change of course
The massive outflow of funds from gold ETFs (exchange-traded funds) by institutional investors raises questions about the fundamental valuation of the asset.
Dmitry Vishnevsky, an analyst at Digital Broker, is confident that what is happening is precisely a painful correction after historical records, and not proof of the fundamental overvaluation of the metal. According to him, the growth in government bond yields is exerting strong but temporary pressure. The main demand is provided by the public sector.
— Central banks continue to increase reserves: China is steadily buying metal, and the trend towards de—dollarization is only increasing, - the expert notes.
Statistics confirm this thesis, albeit with reservations. In April 2026, the official sector as a whole remained a net buyer, adding about 17 tons of precious metals to global reserves. According to Alexander Potavin, the main buyers were the Central Banks of Poland, China and the Czech Republic. At the same time, some countries, including Uzbekistan and Russia, preferred to lock in profits at high price levels and acted as sellers. Despite local sales, the long-term strategy of regulators in developing countries to diversify reserves away from the US dollar remains unchanged.
Waiting for a reversal
The monetary policy of key central banks, which are trying to mitigate the effects of the Middle East energy crisis, is becoming a determining factor for the further dynamics of quotations. The European Central Bank has already raised rates last week. A similar move is expected from the Bank of Japan, and the prospect of a tightening of the Fed's policy by the end of the year hangs over the market like a sword of Damocles.
— The longer the Middle East crisis lasts, the higher the uncertainty about future inflation. This creates expectations of a potential increase in interest rates, which benefits from the dollar exchange rate, which has an inverse correlation with gold prices," Alexander Potavin explains the logic of the market.
Analysts' opinions differ in their estimates of the timing and levels of the reversal. Strategists at Citi investment bank stick to a bearish scenario: They lowered the three-month forecast for the price of gold to $4,000 per ounce, allowing for a drawdown of another 20% by September in the event of further strengthening of the US currency and an increase in treasury yields.
Russian experts are more optimistic. In the base scenario of FG Finam, prices are expected to return to around $4,800 per ounce by the end of the year. Dmitry Vishnevsky also believes that a trend reversal is most likely in the second half of the year. To do this, it is necessary that the policy of the US Federal Reserve is clarified, and the severe inflationary pressure caused by expensive oil has subsided.
In the current environment, gold is suffering from too high inflation, which forces central banks to "tighten the screws." The market will find the bottom only when the rising cost of borrowing finally slows down the global economy, forcing regulators to abandon hawkish rhetoric. Until then, the metal will have to compete with government bonds and shares of AI corporations for a rapidly shrinking pool of free liquidity.
In the long run, however, gold has a good future. According to the latest survey by the World Gold Council, 83% of central bank officials are confident that the share of international reserves denominated in gold will grow moderately or significantly in the next few years. Three years ago, there were only 62% of such people. At the same time, 45% believe that their own regulator will increase gold reserves against it, which is quite significant. Considering that it is the Central Bank that is currently the main driver of demand for precious metals, this lays a good foundation for price growth.
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