Key facts
- Gold is experiencing its worst quarterly performance in 13 years, with a 16% drop in Q2 2026.
- The precious metal has declined 27% from its all-time high of over $5,600 in January, now trading above $4,000.
- A bearish 'death cross' technical signal has appeared, indicating potential further price declines.
- Higher interest rates and a strengthening US dollar are weighing on gold prices.
- Speculative interest has waned, leading to significant outflows from gold ETFs.
- Major financial institutions have revised down their year-end price targets for gold.
Gold is experiencing its worst quarterly performance in 13 years, with a significant 16% decline in the second quarter of 2026. The precious metal has fallen 27% from its all-time high of over $5,600 per ounce reached in January, and is now trading just above $4,000.
At the end of the quarter, gold flashed a 'death cross,' a bearish technical signal where the 50-day moving average falls below the 200-day moving average, often preceding further price drops. This technical signal validates the view that gold was in a bubble at the end of 2025, a trade that is now unwinding, according to Jeff deGraaf, Chairman of Renaissance Macro Research.
The rally in gold last year was largely driven by expectations of falling US interest rates, which would make non-yielding assets like gold more attractive. However, the new Federal Reserve Chair, Warsh, has adopted a more hawkish stance, prioritizing inflation reduction and keeping rates unchanged or potentially raising them. This has led to a strengthening US dollar, which is up around 3% year-to-date.
Speculative mania has also ended, with the momentum-driven rally of 2025 not replicating this year. Gold ETFs saw approximately $3 billion in net outflows during the second quarter. Many forecasters have consequently lowered their bullish outlooks for gold. Goldman Sachs recently cut its year-end price target by $500 to $4,900 per ounce, citing shifting interest rate expectations. Bank of America also indicated that its previously projected $6,000 per ounce target now appears unlikely.