Gold outlook 2026: Is safe haven's rally running out of steam or just pausing before the next big move?

Gold is not failing to rise; it is simply consolidating after an extraordinary rally

• Oil prices hit $119 due to US-Israel-Iran conflict and output cuts
• Gold and silver prices drop amid liquidity stress, strong dollar
• Gold expected to rebound and reach $5,500–$6,000 by end of 2026

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The United States–Israel conflict with Iran entered its 11th day on March 10, 2026, and West Texas Intermediate (WTI) crude futures dropped below $90 per barrel after rising to nearly $119 a day earlier, following comments by US President Donald Trump suggesting that the war with Iran could end soon.

A day before, the spike came as several Gulf nations reduced output after the recent drone attacks. The United Arab Emirates and Kuwait have joined Iraq's earlier production cuts. Meanwhile, Saudi Arabia has shut down its largest refinery, and Qatar has halted operations at key LNG production facilities.

Gold and silver prices have fallen, despite rising tensions after the United States and Israel launched strikes on Iran. Gold has dropped around 4 percent to $5166 per ounce. In India, MCX gold slid below Rs 1.61 lakh per 10 gram, and silver trading at Rs 2.77 per kg today dropped over 4 percent in the past 11 days as global bullion weakened.

Kaynat Chainwala, AVP - Commodity Research, Kotak Securities, said, "Higher energy prices are strengthening the US dollar, which is acting as the primary safe-haven asset amid escalating tensions in West Asia."

At the same time, markets are increasingly concerned that elevated energy costs could reignite inflation, potentially limiting the ability of the Federal Reserve to cut interest rates aggressively.

"In addition, liquidity stress and forced liquidation during the broader market sell-off have pressured bullion prices in the short term. Investors are selling assets, including precious metals, to meet margin calls, which has triggered temporary weakness in gold and silver. COMEX Gold and Silver have extended losses from last week and currently trade around $5010/oz and $87/oz, respectively," said Chainwala.

Gold outlook 2026

If geopolitical tensions begin to ease, the current dollar strength may fade and forced liquidations could unwind, creating room for gold and silver to stage a rebound. However, the direction from here will largely depend on how the conflict evolves.

If tensions persist or escalate further, the impact could extend beyond a temporary shock and lead to more prolonged volatility across commodity and financial markets.

At this stage, the recent move in bullion appears to be driven primarily by liquidity pressures rather than a clear deterioration in gold’s underlying fundamentals.

Looking ahead, several supportive factors remain in place for gold.  Chainwala said, "Ongoing central bank purchases, persistent trade and tariff uncertainties, the upcoming 2026 United States midterm elections scheduled for November, and broader currency debasement themes continue to provide underlying support for precious metals. With these macro risks still present, gold has multiple tailwinds and could potentially reach fresh record highs in the second half of the year."

Gold is not failing to rise; it is simply consolidating after an extraordinary rally. Prices have already surged significantly over the past year, so short-term corrections are natural as investors take profits.

"Even if volatility continues in the near term, these factors support the long-term bull market in precious metals. By the end of 2026, gold could trade in the $5,500–$6,000 range, with dips likely attracting fresh investment demand from institutional and retail investors," said Dr Renisha Chainani, Head of Research at Augmont.

Despite short-term volatility, the overall trend for gold remains positive because global uncertainty, inflation concerns and central bank buying are still strong factors supporting demand.

"By the end of 2026, we expect gold prices to remain firm and potentially move higher, as gold continues to be a trusted long-term store of value. Even when prices fluctuate in the short term, investors and consumers still see gold as a reliable asset for protection against economic and geopolitical uncertainties," Piyush Gupta, director at PP Jewellers by Pawan Gupta, told Moneycontrol.

Additionally, Satish Dondapati, Fund Manager, Kotak Mutual Fund, said: "The long-term outlook for gold remains positive. Central banks around the world are steadily increasing their gold reserves, global debt levels are very high, and geopolitical tensions remain elevated. Also, some countries are slowly reducing dependence on the US dollar in their reserves. These factors should continue to support gold prices going into 2026."

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