Quarterly Commodities Outlook is available for free now. Download your report →
By: Fawad Razaqzada, Market Analyst
Gold was heading into the third quarter of 2026 limping. After a large drop in March, the metal edged lower in April and May before taking another plunge in June. That meant the precious metal was on course to end the second quarter down in double digits. The metal peaked just under $5,600 in January and it was now set for its first quarterly drop in 11 quarters, after falling back below the key $5,000 level and later the next psychological level of $4,000 per ounce. The metal was thus down nearly 30% from its all-time high, which meant it was in a technical downtrend. Against this backdrop, the gold outlook for the second half of 2026 was at least mildly bearish at the time of writing on June 26th.
In the short term, gold remains under pressure as investor demand continues to fade, with growing concerns over the Federal Reserve’s monetary policy outlook weighing on sentiment. Much of this weakness reflects expectations that the Fed will keep interest rates on hold through 2026. However, if policymakers are forced to resume tightening and deliver three or four rate hikes instead, the downside for gold could become much more pronounced.
Persistent outflows from gold-backed exchange-traded funds reinforce this cautious near-term gold outlook. As reflected in ETF outflows, investor appetite for the metal has weakened considerably in recent weeks, leaving central bank buying as the main source of support. That trend looks set to continue, with official sector demand likely to remain a key pillar for gold over the coming quarters.
That said, the longer-term outlook remains constructive. I still believe gold is likely to push to fresh record highs over time, driven by concerns over widening fiscal deficits and the potential return of the de-dollarisation trade. We saw how powerful that theme became last year and into the early part of this year, when emerging-market central banks shifted reserves away from US Treasuries, helping to fuel strong gains in both gold and cryptocurrencies. At the same time, robust investment demand from China should continue to provide an important source of long-term support for the precious metal.
The Iran conflict remained the key focus for much of Q2. After crude oil surged above $100 in March, prices remained elevated in April. This helped to provide support for the dollar and bond yields. That combination provided a toxic mix for gold, as bets for central bank rate hikes outweighed heightened haven demand. When the two sides finally agreed on a deal, gold initially popped higher with everything else. But it then resumed lower, as the dollar found renewed support from a hawkish Fed under a new chairman in Kevin Warsh.
Confidence was already shaken after gold’s one-way price action in preceding quarters had come to a halt in March. But the fact that the US dollar stayed supported after the US-Iran deal, this suggests that the coming months could remain unfavourable for gold amid a hawkish Fed, strong dollar and reduced have demand. Thus, the gold outlook for Q3 and beyond will depend more on how the US economy and inflation data will evolve from here than was the case during the height of the Middle East crisis. This makes gold more sensitive to data releases again.
Gold’s recent struggles mean the prior strong bullish trend has weakened, if not broken entirely. A fresh bullish catalyst needs to emerge to encourage the buyers to return. The more recent struggles come after the metal had enjoyed one of its strongest years on record last year. Fuelled by aggressive central bank buying, a global interest rate cutting cycle and elevated safe-haven demand, the metal surged 65% in 2025, before giving back some of those gains this year. Without some of these bullish catalysts, it is difficult to foresee another bullish year for gold. The key question now is whether we will see some further downside follow through as we move through the third quarter of 2026 and beyond, or whether dip-buys will show up to take advantage of weaker prices.
The near term macro backdrop is shaping to be different all of a sudden. The past oil shock has revived inflationary worries while surprising resilience in the US economy has raised expectations that the Fed will re-start hiking rates later this year.
Those expectations are helping to fuel a rally in the dollar. Looking ahead, investors will be weighing the impact of a potentially stronger dollar against any further central bank gold buying. It is difficult to say which of these forces will ultimately prove the strongest, but we see the potential for some further downside for gold - especially if the dollar remains supported - before the metal becomes fundamentally undervalued again.
Source: TradingView
Gold has broken its bullish trend that had been in place since January 2025, meaning the technical gold outlook has become a lot gloomier. The breakdown came after several consecutive weeks in which gold finished lower. The metal has also broken through a number of key interim support levels.
Thus, given this recent bearish price action, with a pattern of lower highs and lower lows, the path of least resistance now appears to be to the downside. Selling pressure could accelerate if we see a decisive break below the psychologically important $4,000 level in the coming weeks.
If the $4,000 level gives way, that could pave the way for a decline towards $3,900, $3,800, and beyond, with $3,500 representing the next major downside target.
On the upside, resistance is now seen around $4,275, where the underside of the broken bullish trendline comes into play. Above that, $4,500 is likely to be the next important area of resistance, should we get there.
The most recent high, set in mid-April, comes in at $4,890. If gold breaks above that level, then the bearish outlook would be invalidated, and we could see prices climb back above the $5,000 mark. But we’ll cross that bridge if and when we get there. For the time being, the path of least resistance remains to the downside.
This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.
The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.
References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.
StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.
R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.
StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.
This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.
StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.
StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).
SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.
StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism.
StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.
StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.
StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
© 2026 StoneX Group Inc. All Rights Reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
The Australian dollar enters Q3 with the market's focus shifting away from geopolitics and back towards monetary policy and economic data - what will that mean for AUD/USD in H2?
The balance of risks continues to favour USD/JPY upside, although the path higher is unlikely to be a straight line - read on for more details!
Crude oil prices have retraced sharply toward pre-war levels, falling more than 40% from their yearly highs - what does the second half of the year have in store?
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
