Barclays has maintained its bullish long-term outlook for gold, forecasting the metal will reach $4,791 per ounce by the end of 2026 and $4,900 in 2027, even after a sharp correction during the Iran conflict.
In a research note published this week, the UK bank’s cross-asset research team, led by Lefteris Farmakis and Themistoklis Fiotakis, said gold’s recent 26% decline was driven by temporary factors that overwhelmed its safe-haven appeal, according to a Kitco report.
These included a stronger US dollar, rising yields, a surging equity market, and unwinding of leveraged positions, along with sales from Russian and Turkish central banks.
Temporary factors caused recent weakness
The analysts noted that gold’s slide from its January peak to its June trough reflected a normalisation of real interest rates, markets pricing out Fed rate cuts this year, and the short-term appeal of rising stocks.
They calculated that the rise in the dollar index and the 10% S&P 500 rally accounted for about 10% of the gold price decline, with the rest coming from position unwinding.
However, Barclays believes these pressures are temporary.
The bank estimates gold’s current fair value at around $4,150 per ounce and expects a rebound as the Iran-related geopolitical stress dissipates.
Structural drivers remain strong
The Barclays team emphasised that gold’s core structural supports, persistent inflation, policy uncertainty, and continued central bank reserve diversification, are still fully intact.
They described these as “slow-moving variables whose influence accumulates over time,” making them less effective during short-term shocks like the Iranian crisis but powerful over the medium term.
The bank also highlighted the inflationary impact of the Iranian energy shock, noting that every percentage-point increase in inflation gives gold a roughly 5% uplift.
With expectations of a reassertion of the dollar’s downward trend, a return to consistent central bank buying, and sustained upward pressure on inflation from higher energy prices, Barclays sees gold regaining momentum.
Mining stocks recommended
Barclays maintained its 2026 and 2027 price targets at $4,791 and $4,900 per ounce.
The analysts warned there may still be some short-term mark-to-market downside but recommended exposure to gold mining stocks, including Endeavour, Hochschild, Fresnillo, Newmont, and Agnico Eagle.
“Recent price gyrations notwithstanding, if there is a period when gold ought to be trading at a premium, it is now,” the Barclays team said.
Outlook remains constructive
The bank’s optimistic stance comes as gold has corrected sharply from earlier highs amid the Middle East conflict.
However, with the conflict appearing to wind down and structural drivers re-emerging, Barclays expects the yellow metal to resume its upward trajectory.
The forecast underscores a broader view among major banks that gold’s long-term bull market remains intact, supported by geopolitical risks, monetary policy uncertainty, and ongoing de-dollarisation efforts by central banks worldwide.
For investors, the current environment may offer an attractive entry point, according to Barclays, as temporary headwinds fade and fundamental strengths reassert themselves through the remainder of 2026 and into 2027.
As a non-interest-bearing asset, gold is benefiting from this revised assessment, after having previously come under pressure due to the pricing in of interest rate hikes.
“Should the new Fed Chair, Warsh, further dampen interest rate expectations at his first press conference on Wednesday, the recovery in the gold price is likely to continue,” Carsten Fritsch, commodity analyst at Commerzbank AG, said in a report.
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