Gold Prices Flat for Eight Months Amid Geopolitical Tensions and Rate Cut Uncertainty
Gold prices have been flat for eight months, falling nearly 20% from their peak in January. Despite this decline, analysts say that gold's 'structural bull run' remains intact.
The metal is currently trading around $4,500 per ounce, levels last seen in December 2025. This price drop can be attributed to opposing forces influencing the market: geopolitical risks driving demand for portfolio protection, and softer inflation components keeping rate cut discussions alive.
Kaynat Chainwala, AVP at Kotak Securities, notes that gold's consolidation near $4,500 reflects a 'tug-of-war' between supportive demand and macroeconomic headwinds. The US-Iran tension continues to impact oil prices, which have risen nearly 30% above pre-war levels.
The resulting increase in inflation is restricting the US Fed's ability to lower interest rates without potentially reigniting price inflation. This has led to expectations of a rate hike or unchanged rates in 2026, rather than rate cuts.