After enduring its steepest weekly decline since early June, the gold market now finds itself at a critical crossroads. While surging oil prices driven by geopolitical conflict have reignited fears that the Federal Reserve will maintain its hawkish stance, weighing heavily on bullion, two heavyweight institutions—Bank of America and Fidelity International—have recently voiced their firm conviction in gold’s long-term trajectory, arguing that the current deep correction has not invalidated the structural bull case.
Gold swung between gains and losses this week. Although spot prices briefly reclaimed the $3,992 level during Friday’s session, the metal is still nursing a weekly loss of nearly 3%, after Thursday’s sharp slide rekindled rate-hike anxiety. Morgan Stanley analysts noted that gold’s retreat from its January peak near $5,600 now amounts to roughly 29%—only the fifth drawdown of more than 25% since 1960.
The fallout for precious metals equities has been far harsher. Behind gold’s struggle to hold the psychologically critical $4,000 level lies a broader repricing of the macro outlook by hedge funds and commercial banks. The backdrop remains hostile: clashes between the US and Iran have persisted for days, and oil prices have surged almost 13% in just five sessions. While swap market traders see only a 10% probability of a Fed rate hike at this month’s meeting, at least one increase is now fully priced in by year-end, as the specter of higher energy costs feeding back into inflation looms large. The head of commodity strategy at Saxo Bank noted that renewed gains in oil and fresh US strikes against Iran have revived concerns that elevated energy costs could reignite inflationary pressures.
Amid persistent selling pressure, Bank of America’s technical analysts have not sugar-coated the outlook. They warn that the current correction may require more time and do not rule out a potential test of support near the $3,600 level.
In his latest note, BofA technical analyst Paul Ciana observed that while gold’s year-to-date correction has reset an extremely overbought advance, evidence of a durable low remains questionable. He pointed out that the current pullback is only 24 weeks old, compared with a preceding 121-week rally, making the correction disproportionately short relative to the prior uptrend. Based on technical indicators, Ciana expects gold to remain under pressure through August and September. A key bearish signal has already flashed: the 50-day moving average has crossed below the 200-day moving average, forming a “death cross.” Since 1975, following such signals, gold has traded lower 40 to 50 trading days later roughly 67% to 70% of the time.
Yet BofA is far from pessimistic. Ciana made clear that lower prices would provide buying opportunities, suggesting investors consider averaging down to build positions. The bank’s strategy favors modest accumulation below $4,000, with a willingness to add more aggressively in the $3,700–$3,600 area. Just a week earlier, although BofA cut its 2026 average gold price forecast by 14% to $4,360, it still sees a path for gold to reach $6,000 by 2027.
Echoing BofA’s tactically bearish but structurally bullish stance, Ian Samson, multi-asset portfolio manager at Fidelity International, offered a similar perspective. He had downgraded Fidelity’s gold position from overweight to neutral earlier this year, just before the metal’s multi-year rally was interrupted near the $5,600 peak. Now, after gold’s worst quarterly performance in over a decade, Samson insists the core logic underpinning gold’s long-term trajectory has not been invalidated. “We have a plan to go overweight gold again,” he emphasized. “The question now is when to act.”
Samson acknowledged that, from a tactical perspective, headwinds and tailwinds are currently evenly matched, and he expects gold prices to end the year only modestly higher than current levels. But Fidelity has not abandoned its conviction: the firm expects gold to re-enter a bull market at some point in 2027. As long as the global macro environment does not undergo a fundamental shift—with governments returning to orthodox fiscal policy and central banks making genuine efforts to bring inflation down—the bullish case for gold will not be undermined. And in Samson’s view, that is not the world we currently inhabit.
From a fundamental standpoint, Samson identified central bank buying as the single most important structural force supporting gold prices over the medium and long term. “If you have these large, structural, strategic buyers, it’s almost inevitable that the gold price will be pushed higher,” he said.
As for the timing of a recovery, Samson is closely monitoring the technical charts. He believes gold can find near-term support around the $4,000 area, but a clear signal of strength would require the 50-day moving average to cross back above a longer-term moving average, or for prices to climb above $4,300. For now, the $4,000 mark has become the pivotal battleground defining the metal’s direction.
