Metals and Miners
Gold Drops Another 8.5% to $4,175
The correction in gold prices continued over the past month, with gold dropping another 8.5% to $4,175. The price briefly dipped below $4,000 several times in late June, but quickly bounced back above $4,000, carving out a bottoming pattern.
The chart shows gold giving back all of the gains since November of last year, but finding solid support around $4,000. Gold is down nearly 30% from the January highs, a much deeper correction than expected. It marked the largest quarterly drop in gold in over a decade. The RSI became oversold twice in June, and gold is trading well below all key exponential moving averages (EMAs).
This looks like a bottom and a clear buying signal to increase exposure on the dip. I expect the gold price to climb back above $5,000 per ounce before the end of the year or during Q1 of 2027 at the latest.
Stronger-than-expected US jobs data in early June fueled expectations of Fed rate hikes (or delayed cuts), boosting the dollar and real yields, which pressured the non-yielding metal.
However, the July jobs data came in much weaker than expected, and gains in previous months were revised lower. Nonfarm payrolls: +57,000 jobs (well below the ~110,000–115,000 consensus forecast). This was the slowest pace in several months.
Previous months were revised lower: April and May combined saw -74,000 jobs revised down. This significantly reduces the odds of a rate hike this year and increases the odds of one rate cut.
I view the recent price action as a healthy consolidation (not a trend reversal) in an ongoing bull market. If anything, the sell-off looks overdone and is presenting an amazing buying opportunity.
Miners faced pressure from the price drop but were seen as attractive on any rebound due to strong margins.
Bullish factors include:
Central bank demand remained robust: Net buying resumed in April (e.g., Poland +14t, China +8t, extending China's streak). The World Gold Council’s 2026 survey showed a record 45% of central banks planning to increase their own reserves (89% expect global CB reserves to rise), citing geopolitical risks and diversification away from the USD.
Analyst forecasts stayed optimistic: Institutions like Goldman Sachs (~$5,400), JPMorgan (~$6,000), UBS, and others projected strong year-end 2026 prices (many 25–50%+ above June levels). Some voices (e.g., Yvonne Blaszczyk) eyed $6,000/oz by year-end.
Broader supports included persistent inflation concerns, geopolitical tensions, and record global demand (e.g., 1,231 tonnes in Q1).
Takeaway: The 30% correction in gold prices due to interest-rate concerns appears overdone. Trump and his handpicked Fed Chair want lower interest rates to stimulate the economy, and the July jobs report reversed prior bullish sentiment toward the labor market. Technical signs also point to gold being oversold, forming a bottoming pattern, and presenting an excellent buying opportunity. I will look to increase exposure this week.
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