Is Gold’s Bull Market Over? Three Reasons the Fundamentals Say No
Key Points:
- My base case is bullish. Spot gold (XAU/USD), near $4,000 to $4,020 after testing the $3,959 support on July 17, should hold $3,886 to $3,959 near term, then climb toward the $4,730 to $4,900 by Q4 2026.
- Main drivers are the hawkish Fed repricing after a Strait of Hormuz oil shock, against softer June CPI and PPI and a resilient labor market.
- The overlooked driver: headline central bank and ETF flow data looks bearish, but unreported official buying, Chinese imports and premiums, and the reserve shift from Treasuries tell a fuller story.
Gold had a rough week, then clawed most of it back. It tested $3,959 before closing back at $4,017 on July 17, and that recovery has held into this week’s open. The round trip tells the story which is the fighting between the U.S. and the Iran that pushed oil up roughly 12% and repriced the Fed, while cooler core inflation kept the floor from giving way. CNBC framed it as the worst week in six weeks, and USAGOLD’s daily report had the same close. My read is the boring one, and boring is usually right here i.e. this is a correction inside a bull cycle still running. The demand that actually moves this market, central banks and Asia, kept climbing through the same week the headlines turned into bearish. What follows is the news, the cycle, the evidence for that read, and the level that would prove me wrong.