Gold's Long Game: Bullion Sits Near a One-Year Low, Yet Strategists Lift Their 2027 Target to $4,650

Gold is nursing a modest rebound in Asian trading, but the metal remains pinned close to a one-year trough — a recovery that offers little comfort to anyone hoping the forces behind Friday's rout have faded. Those forces were on full display at the end of last week, when bullion shed 3.6% in a single session as rising oil prices and stubborn inflation worries hardened expectations of further US rate hikes, according to Reuters.

The pressure is not confined to the futures market. dpa-AFX reported that climbing energy costs and eurozone inflation data fed the same rate-hike narrative on Friday, meaning the drag on the non-yielding metal extends well beyond the fate of American technology shares. For investors, the distinction matters: alongside the prospect of higher rates — which erodes the appeal of an asset that pays no coupon — there is the separate question of forced liquidation.

Margin Calls and a Tech Wreck

Reuters pointed on Friday to a possible second driver behind the sell-off. Commerzbank analysts floated the idea that the slump in technology stocks, and the margin calls that followed, may have triggered gold sales as well. Doubts over the profitability of heavy investment in artificial intelligence weighed on equity markets, and holders may have offloaded bullion to cover losses elsewhere or to meet collateral demands. That explanation remains a possibility rather than a confirmed breakdown of the selling — but it illustrates why gold can come under pressure even when uncertainty is rising: when investors need cash, its role as a hedge offers no guarantee of protection against short-term losses.

Should investors sell immediately? Or is it worth buying Gold?

A Survey Pointing in Two Directions

The Reuters poll published on 27 October captures the market's conflicting impulses. The median forecast for 2027 was raised to $4,650 per troy ounce, while the expectation for the current year was cut. Reuters cited high US Treasury yields, a strong dollar and a prolonged period of elevated rates as the drags behind the more cautious near-term view — factors that explain the downgrade without justifying a permanently bearish outlook. Both figures refer to annual average prices, not short-term price targets or a promise of recovery. What stands out is the diverging direction: respondents took a dimmer view of the nearer horizon and a brighter one of the years beyond it.

Central Banks and Asian Buyers on the Other Side

Physical demand is providing the counterweight. The World Gold Council reported on 20 October that China's central bank bought 23 tonnes of gold in September — the largest monthly increase since October 2023 — while Chinese ETF demand carried on into early October. The council had noted in October that gold ETF demand in China held up at the start of the month as investors diversified amid continued weakness in the equity market. Such purchases are a counterbalance, though they do not guarantee a short-term price floor.

India tells a similar story of resilient appetite. The World Gold Council reported on 20 October that discounts to import parity narrowed, which it attributed to strengthening seasonal demand, while describing domestic supply as sufficient thanks to scrap gold and unofficial inflows. The LBMA's report for the third quarter of 2026 highlighted sustained central bank buying and, for India, resilient wedding demand ahead of the November-to-February season along with strong physical investment interest.

What to Watch Next

The tug-of-war between physical buying and the rate outlook leaves gold in a market pulled in opposite directions. A more detailed demand report from the World Gold Council, announced for early November, should shed further light on the demand side. On the rates front, attention now turns to the US labour market report on 06.11.2026 and US consumer prices on 10.11.2026 — data points that will show whether expectations of further hikes are about to gain more support.

Ad

Gold Stock: New Analysis - 2 November

Fresh Gold information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Gold analysis...