When will gold prices drop? In-depth analysis of price trends for 2025-2026

The Reality of the Current Gold Market: Excessive Purchasing Power

Gold prices have broken through the psychological level of $4,000 per ounce and are now climbing to an all-time high of $4,181 per ounce (as of October 20, 2023), representing a growth of over 66% since the beginning of 2023.

What’s interesting is that the rapid surge from $3,000 to $4,000 in just 7 months is shorter than the previous 14 months it took to move from $2,000 to $3,000. This acceleration indicates unprecedented buying power.

In the Thai market, 96.5% pure gold bars are also soaring past 62,000 THB, prompting analysts to significantly revise their target levels upward.

Leading Financial Institution Perspectives: Gold Has Further to Go

Goldman Sachs: Target of $4,900 by 2024

The Wall Street investment giant has raised its gold price target from $4,300 to $4,900 per ounce. Analyst Lina Thomas states that the main drivers are sustained demand from central banks and massive inflows into gold ETFs.

UBS Group: Central Bank Gold Accumulation Never Seen Before

This Swiss financial institution has set a year-end 2023 target of $3,500. Joni Teves’s strategy indicates that central banks worldwide added over 1,200 tons of gold reserves in just 2023 alone.

For the Thai market, if we calculate, reaching $4,900 could mean gold prices touching 75,000-80,000 THB per baht of gold within 2024.

Four Main Drivers Supporting Gold’s Upward Movement

1. Trade Tensions Between Major Powers

The US-China trade war has intensified, with news of potential 100% tariffs on goods, creating global economic uncertainty and prompting investors to accumulate safe-haven assets like gold.

2. US Interest Rate Cuts

The US Federal Reserve ((Fed)) has signaled rate cuts, weakening the dollar. Lower interest rates have an inverse effect on gold prices because when interest rates fall, the opportunity cost of holding gold decreases.

3. Central Bank Gold Accumulation Amid De-dollarization Trends

Many central banks, especially emerging markets, have purchased over 1,000 tons of gold annually for three consecutive years (2021-2023). This movement reflects efforts to diversify away from the US dollar following Russia’s asset freeze.

4. Efforts to Create a Currency Challenging the Dollar

News of BRICS establishing a digital currency backed by gold has challenged the dollar, increasing demand for gold.

Technical Indicators: When Will Gold Drop in the Short Term?

Overbought RSI

The RSI indicator for gold shows an overbought condition (Overbought), warning of a possible short-term correction or profit-taking after the recent strong rally.

Shooting Star Candlestick Pattern

The appearance of a Shooting Star candlestick pattern on the chart may indicate a potential short-term reversal or pullback.

Key Breakout Level

Prices recently broke through the psychological resistance of $4,000. A retest at $3,980-4,000 will be an interesting zone to watch for signs of reversal.

Risk Factors That Could Cause Gold to Fall

( Successful Trade Negotiations to Ease Tensions

If the US and China reach a mutual understanding, uncertainty will decrease, leading investors to move away from gold.

) Profit-taking After Overextended Gains

After approximately 8 weeks of continuous gains, investors may start taking profits, exerting downward pressure, especially if technical signals show overbought conditions.

US Dollar Recovery

If the US economy performs better than expected and the Fed delays rate cuts, the dollar could strengthen, putting downward pressure on gold.

Higher-than-Expected Interest Rates

If inflation does not decrease as market expectations and the Fed maintains high interest rates, gold’s appeal will diminish due to the high opportunity cost.

Three Gold Trading Strategies

1. Buy on Dips ###Buy the Dip###

In a strong uptrend, wait for retracements to buy:

• First support at $3,859
• Confirm with technical signals like RSI approaching 50 or MACD turning higher
• Set stop-loss below $3,750
• Profit target at $4,084-4,113

( 2. Breakout Retest Trading

Once prices break resistance:

• Wait for a pullback to test the $3,980-4,000 zone
• Confirm buying interest )price rebounds###
• Enter when bullish reversal candles appear
• Set stop-loss at $3,950

( 3. Fibonacci Retracement System

Draw from the start point )$3,500### to the high ($4,059):

• Look for buy zones at 38.2% or 61.8%
• Place stop-loss below the next level

Final Perspective: Gold Is Still in an Uptrend but Watch for Volatility

Gold in 2025-2026 shows a clear upward trend. Most global financial institutions project prices could reach $4,900, which for the Thai market translates to opportunities of 75,000-80,000 THB.

However, gold remains highly sensitive to various factors—from monetary policies to geopolitical and economic developments. Timing entries well and remaining patient amid short-term volatility are key to successful gold investing.