Gold Prices May Correct Up to 8% Before Rallying Towards $5,500

Gold prices may experience a correction of up to 8% in the near term before resuming their rally towards USD 5,500 over the next 12-15 months, according to Motilal Oswal Financial Services Ltd. (MOFSL). The brokerage house recommends investors adopt a staggered accumulation strategy and remain patient.

The report notes that geopolitical conflicts no longer automatically translate into gains for gold, highlighting a shift in the factors driving its prices. Gold started 2026 strongly on tariff uncertainty, robust ETF inflows, central bank buying, and expectations of US Fed rate cuts.

However, the narrative shifted in Q2 as tariffs and the US-Iran conflict fueled inflation concerns, prompting markets to price in higher-for-longer rates, lifting real Treasury yields, and weakening gold's safe-haven appeal. Until real interest rates begin to fall meaningfully, gold could remain range-bound or face a further 6-8% correction.