Gold experienced a sharp selloff, firmly entering bear market territory as spot prices dropped as much as 2% before settling down 1.5% at $4,335.97 an ounce. Futures fell about 2% to $4,317.80, and silver also declined. This marks a roughly 21% decrease from gold's late-January peak of $5,594.82, underscoring significant short-term weakness in the bullion market [1]. The latest decline was attributed to investors unwinding positions amid a stronger U.S. dollar, which has strengthened around 3% since the start of the war on Feb. 28, and tentative signs of easing geopolitical tensions after U.S. President Donald Trump ordered a five-day pause on planned strikes against Iran's energy infrastructure [1].
Despite the near-term selloff, several market strategists remain bullish on gold's long-term prospects. Ed Yardeni, president of Yardeni Research, reiterated his forecast of $10,000 per ounce by the end of the decade, although he lowered his year-end target to $5,000 from $6,000, which still represents a 15% upside from current levels [1]. Justin Lin, investment strategist at Global X ETFs, maintains a base case of $6,000 per ounce by year-end, describing the recent drop as a "compelling entry point for investors." Lin attributes the selloff to short-term factors such as sensitivity to higher interest rates, portfolio rebalancing amid equity market weakness, and complacency regarding the ongoing conflict in Iran. He emphasizes that his bullish outlook is based on persistent geopolitical uncertainty, continued central bank demand, and sustained inflows from Asian gold ETF investors, rather than war-related risk premia [1].
Structural demand, particularly from emerging market central banks seeking to diversify reserves, is expected to provide a floor under gold prices. Lin noted a "high likelihood" that central banks will increase purchases following the recent selloff, which could help stabilize the market. Standard Chartered also remains constructive on gold's long-term outlook, citing similar structural drivers [1].
Overall, while gold has entered a bear market in the short term, market participants and analysts broadly view the selloff as an opportunity rather than a turning point, with expectations for a recovery driven by structural factors and central bank activity [1].
CONCLUSION
Gold's recent plunge has pushed it into bear market territory, but analysts and strategists remain optimistic about its long-term prospects, citing structural demand and central bank activity as key drivers. Despite near-term volatility, forecasts for significant price appreciation by year-end and the end of the decade persist, suggesting the selloff may present a buying opportunity for investors.