Gold Price Correction Driven by Macro Factors
The gold market has seen significant fluctuations in 2026, hitting a record high of $5,595/oz in late January before falling to a multi-month low near $4,024/oz in mid-June. According to JustMarkets' analysis, several macroeconomic factors are contributing to this price correction.
One key driver is the increase in real yields on US Treasury bonds, which has made non-yielding gold less attractive compared to interest-bearing assets. This shift in market expectations was sparked by better-than-expected employment reports and hot CPI data in early June, leading investors to pivot from cutting interest rates to holding them steady or even raising them.
The strengthening of the US dollar is another factor putting pressure on gold prices. When the USD index surpasses the 100 mark, gold becomes relatively more expensive when purchased with other currencies, potentially leading to a decline in physical gold demand.
Central banks were previously driving up gold prices between 2025 and 2026, with their purchasing volume nearly doubling compared to the historical average. However, recent activity has become more erratic, with some banks reducing their positions.