Gold erases 2026 gains amid fears of a decline cycle that “lasts years”
Traders in the gold markets were greatly disappointed last week, after the yellow metal failed to continue rising from its historic peak recorded last January, which touched 5,600 A dollarper ounce.
Until the last trading session, on Friday, June 5, 2026, gold closed at $4,327 per ounce, down by 3.3%, thus dispelling all of its gains since the beginning of the year.
History repeats itself
According to a report by the agency "Reuters"price data shows that strong rises, such as the 245% rise between September 2022 and January 2026, are usually followed by significant declines, even if the bulk of the gains are maintained.
After Gold170% in the period from October 2008 to September 2011, declined by 37% by August 2018, then jumped 74% in August 2020 before falling 22% by September 2022.
What is noteworthy, according to the report, is that greater rises are matched by deeper declines, and periods of decline take longer than periods of rise.
Gold price forecasts: room for more Landing
Report indicates "Reuters" Since the bottom of September 2022, gold has embarked on an exceptional rise that peaked at $5,594.82 on January 29, before falling to 4,327 in the last trading session. Based on the historical pattern, there may be room for further decline in the coming months and years before the uptrend resumes, but this assumes the same dynamics that drove previous rises will continue.
Fear Trading
Three main factors have combined behind the recent rise in gold prices: increased central bank purchases, and strong retail demand in Chinaand India, and investor support for what is known as"Fear trading" From inflation, geopolitical risks, and the undermining of the dollar.
But in recent months, central bank purchases have decreased to about 200 tons per quarter, compared to more than 300 tons previously, and consumer demand has also declined in China and India.
Decline in demand for jewelry
According to the latest World Gold Council reports, demand for jewelry in China fell by 31% in the first quarter of 2026, and in India by 19%, and flows to gold exchange-traded funds also declined. 73%, bringing the total demand for gold to fall 9% to 1195.9 tons. This makes the modest 20 percent decline since the January peak a relatively good performance.
Interest Rates and the Iran War
The real problem for gold investors at the moment is that the price is currently driven by monetary policy expectations rather than traditional factors. This is evidenced by the recent inverse relationship with crude oil. When oil prices rise due to the conflict between the United States and Iran, gold declines, and vice versa. Thus, gold becomes a hostage to developments in the war with Iran, like other assets.
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