Gold Slumps as Yields Test Market and Central Banks Continue Buying
Gold's market performance was marked by two opposing forces this week: central banks quietly buying up bullion while sell-side strategists cut their price targets. The metal finished Friday at $4,144.04 an ounce on the spot market, down 0.8% on the day and now trading 26% below its 52-week peak of $5,598.58.
The retreat has carried gold beneath its 50-day moving average of $4,336.51, a technical level that had previously underpinned the rally. Forecast cuts from major houses, including Wells Fargo Investment Institute and HSBC, suggest institutional observers are positioning for an extended period of elevated rates.
Wells Fargo trimmed its end-2027 gold target to $5,200 to $5,400 per ounce on Wednesday, citing impending Federal Reserve rate hikes and the strength of the US dollar as headwinds. HSBC followed on Thursday, cutting its average 2026 price projection to $4,490 an ounce and lowering its 2027 estimate to $4,825.
The scale of the yield backdrop is difficult to overstate, with ten- and 30-year US Treasury yields reaching their highest levels since 2002. This has lifted the dollar and stripped momentum from a brief commodities rebound, leaving rate expectations as the dominant driver in gold's market performance.