Barclays forecasts gold will reach $4,791 per ounce in 2026 and $4,900 in 2027 despite a 26% decline during the Iran conflict, according to a research note published Monday. The UK banking giant's cross-asset research team, led by Lefteris Farmakis and Themistoklis Fiotakis, attributed the selloff to a stronger U.S. dollar, surging equity markets and leveraged position unwinding that overwhelmed gold's safe-haven appeal. The analysts said gold's structural drivers — persistent inflation, policy uncertainty and central bank demand — remain intact and will reassert themselves as geopolitical stress from the Hormuz crisis dissipates.
Dollar Strength and Equity Rally Drove Gold's 26% Decline
The Barclays team said gold's three-month selloff was driven by the stronger U.S. dollar, equity markets absorbing available risk capital, and the unwinding of leveraged gold positions. Russian and Turkish central bank gold sales also contributed to the weakness. The analysts said gold's slide from its January peak to its June trough reflected a normalization of real interest rates and markets pricing out Fed rate cuts this year. The team calculated that the rise in the dollar index and the 10% S&P 500 rally accounted for 10% of the gold price decline, with the remainder coming from position unwinding in the metals markets.
Barclays Identifies Inflation and Central Bank Demand as Structural Drivers
The analysts said the factors behind gold's decline are temporary and that gold's structural drivers — persistent inflation, policy uncertainty and continued reserve diversification — are still intact. They characterized these drivers as "slow-moving variables whose influence accumulates over time," which is why they were ill-suited to support gold prices during the short-term shock of the Iranian crisis. Barclays calculated that every percentage-point increase in inflation gives gold a 5% uplift, and they believe the inflationary impulse of the Iran energy shock will be supportive. The bank said they now anticipate a reassertion of the dollar's downward trend, a return to consistent central bank buying and sustained upward pressure on inflation from higher energy prices.
Barclays Estimates Gold Fair Value at $4,150 Per Ounce
The bank estimates gold's fair value price currently sits at $4,150 per ounce, and they expect a rebound now that the Iran conflict appears to be winding down. Barclays said they are maintaining their 2026 and 2027 gold price forecasts at $4,791 and $4,900 per ounce, but warned that there may still be some short-term mark-to-market downside. The analysts also recommended exposure to gold mining stocks, including Endeavour, Hochschild, Fresnillo, Newmont and Agnico Eagle. "Recent price gyrations notwithstanding, if there is a period when gold ought to be trading at a premium, it is now," they said.
FAQ
What did Barclays forecast for gold prices in 2026 and 2027?
Barclays forecasts gold will reach $4,791 per ounce in 2026 and $4,900 per ounce in 2027, according to a research note published Monday by the bank's cross-asset research team led by Lefteris Farmakis and Themistoklis Fiotakis.
Why did gold decline 26% during the Iran conflict?
The Barclays team attributed the three-month selloff to a stronger U.S. dollar, equity markets absorbing available risk capital, the unwinding of leveraged gold positions, and Russian and Turkish central bank gold sales. The analysts calculated that the rise in the dollar index and the 10% S&P 500 rally accounted for 10% of the gold price decline, with the remainder coming from position unwinding in the metals markets.
What are the structural drivers supporting gold according to Barclays?
Barclays identified persistent inflation, policy uncertainty and continued reserve diversification as gold's structural drivers that remain intact. The analysts characterized these as "slow-moving variables whose influence accumulates over time" and calculated that every percentage-point increase in inflation gives gold a 5% uplift.
