Gold fell to the point of panic! Experts say at this price, should I take advantage now or take the knife?

The drop in gold prices has left investors hesitant, wondering whether to buy, wait and see, or sell. (Reuters)

[Financial Channel/Comprehensive Report] Will gold prices fall further? Affected by rising U.S. government bond yields, a stronger U.S. dollar, concerns about inflation, and profit-taking by investors, the price of gold will fall sharply in 2026. The fact that central banks of various countries have begun to purchase gold is an optimistic factor for the long-term outlook for gold prices.

The drop in gold prices has left investors hesitant, wondering whether to buy, wait and see, or sell. Gold prices are expected to fall about 5% in 2026 and have fallen 13.6% in the past six months. According to TradingView data, the spot gold price was close to $4,194.65 per ounce on October 10. JPMorgan Chase predicts that the price of gold will reach $6,000 in the fourth quarter of 2026.

Why are gold prices falling?

Rising U.S. Treasury yields have been the main reason for the recent decline in gold prices. The U.S. 10-year Treasury bond yield has climbed to around 5.27%. Gold itself pays no interest, so bonds with higher yields are more attractive to investors, which could reduce demand for gold.

A stronger U.S. dollar also weighed on gold prices. The U.S. dollar index has risen more than 3% this year. In addition, market concerns about further U.S. interest rate hikes also put pressure on gold prices.

Rising crude oil prices, fueled by concerns over the Iran conflict, have added to inflationary pressures. Ongoing uncertainty and investors taking profits after gold hit record highs also put downward pressure on gold prices.

International gold prices have fallen by approximately 26% from their peak of $5,595 on January 29. Gold prices in India fell nearly 23%.

Why do experts remain optimistic?

Mirae Asset believes that the central bank’s continued gold purchases are one of the reasons for optimism. The fund expects central bank demand for gold to be close to 700 tons by 2026, up from an average of 470 tons from 2010 to 2021. Central banks buy gold to diversify their reserve holdings among different assets.

Emerging economies are also reducing their reliance on the U.S. dollar. Gold remains attractive because it retains its value and is easy to trade.

Risks to energy supplies, trade routes and government debt have also supported interest in gold. Festive and wedding demand in India may support gold prices. Festivals such as Navratri, Dussehra, Puja and Diwali are expected to boost consumption.

JPMorgan Chase previously predicted that the average price of gold will reach US$6,000 per ounce in the fourth quarter of 2026, and expects the price to reach approximately US$6,300 per ounce by the end of 2027. However, JPMorgan Chase recently lowered its forecast for February 2026, and its forecast for the fourth quarter of 2026 was reduced from $6,300 to $6,000.

However, gold prices are still likely to weaken further, but long-term demand may support prices. It should be noted that price forecasts reflect expectations and do not guarantee future returns.