1. Total Metals Corp (TSXV:TT, FSE: O4N)
Total Metals Corp. is focused on advancing high-grade gold projects to production.
In the first quarter of 2026, the gold market experienced a breathtaking rollercoaster ride. From a steady climb at the start of the year, to hitting an all-time high of $5,589.38 per ounce on January 28, and then plunging to a low of $4,100 in late March, gold prices saw nearly $1,500 of violent fluctuation in just three months. This price storm, driven by a confluence of competing forces, is redefining the logic of gold as a safe-haven asset.
Three Major Factors Shaping Gold’s Price Movement
Looking back at the first quarter, the core variables determining the direction of gold prices were threefold: the trajectory of Federal Reserve monetary policy, the escalation of geopolitical conflict in the Middle East, and the shifts in the strength of the U.S. dollar index.
In early January, markets widely anticipated that the Federal Reserve would pivot to rate cuts in the second half of 2026. At the time, the market believed the Fed needed to strike a balance between controlling inflation and supporting the jobs market. This expectation, coupled with tensions between then-President Trump and incumbent Fed Chair Jerome Powell, reinforced market speculation that “the White House might intervene in monetary policy.” Expectations of rate cuts, combined with a weakening U.S. dollar, jointly propelled gold’s strong rally in January.
However, the outbreak of the Iran war in late February fundamentally altered the market’s calculus. Iran effectively blockaded the Strait of Hormuz, pushing international oil prices above $100 per barrel for the first time since 2022. The surge in oil prices directly intensified inflationary pressures, while recent U.S. economic data also pointed to increased inflation stickiness.
Alex Ebkarian, co-founder of Allegiance Gold, noted: “Gold isn’t reacting to the war itself, but to the fact that the Fed may not be able to cut rates as expected.” The Strait of Hormuz is not just a battleground for oil, but also a theater for monetary dominance—rising oil prices push up production costs, rising fertilizer prices impact agricultural product prices, and the protracted war further burdens the already ballooning U.S. debt.
On March 18, the Federal Reserve again announced it would keep interest rates unchanged, marking its second pause in rate cuts this year. The market began to reprice: rates not only would not fall soon but also faced upside risks. This directly led to a sharp sell-off in gold in late March, with prices briefly breaking below the $4,500 level.
Long-Term Fundamentals Remain Unshaken
Despite short-term pressure, the core logic supporting gold’s long-term upward trajectory remains unchanged. Data from the World Gold Council (WGC) shows that global central banks continue to add to their gold reserves. In January, central banks such as Bank Negara Malaysia and the Bank of Korea began purchasing gold after years of absence, indicating a broadening demand base. Although net purchases in January amounted to only 5 tons, below the 2025 monthly average of 27 tons, the WGC noted that the demand base is widening, with more central banks entering the market.
Meanwhile, the U.S. national debt has approached $39 trillion. Ebkarian of Allegiance Gold believes the gold bull market is only in the “fourth or fifth inning,” because the fundamentals remain unchanged—unprecedented deficit spending and growing debt will continue to support gold’s value.
Outlook for 2026: Short-Term Pressure, Long-Term Optimism
In the short term, the inflationary pressures stemming from the Iran war may force the Fed to maintain higher interest rates, which will continue to weigh on gold prices. David Erfle, founder of Junior Miner Junky, noted that the impact of war on mining companies’ costs cannot be overlooked—for open-pit mines, rising oil prices directly erode profit margins.
Long-term forecasts, however, remain optimistic. Goldman Sachs raised its year-end 2026 gold price target to $5,400 in January. J.P. Morgan, before the Iran war broke out in February, projected that gold could reach $6,300 by year-end, driven by strong central bank demand and a broadening investor base. Ed Yardeni, president of Yardeni Research, although lowering his year-end forecast from $6,000 to $5,000, still maintained his view that “gold will reach $10,000 by the end of this decade.”
For investors, the key word for the gold market in 2026 has shifted from “trend” to “volatility.” Amid the dual uncertainties of monetary policy and geopolitics, gold prices will likely continue to oscillate at elevated levels. The real opportunity may belong to those long-term holders who can maintain patience through violent fluctuations.
