After a blistering near-vertical surge that added almost 40% to its value between late 2025 and early 2026, gold’s recent pullback is anything but a sign of weakness, according to experts.
The precious metal remains firmly underpinned by resilient central bank demand and volatile geopolitical currents, even as rising real yields and currency fluctuations temper its advance.
Pullback as digestion, not weakness
“Contrary to what many think, gold has not fallen on evil times. What is happening since early 2026 is much more of digestion following a remarkable rally than the opposite of the underlying trend,” Eugenia Mykuliak, founder and executive director of B2PRIME Group, a global financial services founder, said.
“A giveback and a time of uneven trade was practically unavoidable,” Mykuliak added.
The explanation for the current pause is quite clear.
Even though real yields have remained positive, the dollar has weakened.
Furthermore, long-term inflation expectations are firmly anchored because, according to the oil futures curve, market participants do not anticipate the situation in the Middle East to persist at its current level for an extended period, according to Mykuliak.
After reaching a lifetime high of $5,626 per ounce on COMEX in January, gold prices have fallen quite a bit.
Since the Iran war broke out in late February, gold prices have seen a decline to $4,600 per ounce at present.
The March correction, which several interpreted as an indicator of warning, was more of a positioning.
Geopolitical pressures and silver’s volatility
Despite a potential upside signaled by a recent decline in long positions, gold and silver are likely to remain sidelined by major investors in the coming weeks due to the persistent Iran conflict and uncertainty over the Federal Reserve’s leadership succession, according to Rhona O’Connell, Head of Market Analysis at StoneX.
O’Connell noted in an update from earlier this week that gold and silver markets have been preoccupied with developments in the Strait of Hormuz in recent weeks.
Meanwhile, silver’s price movement has mirrored gold’s, though with significantly higher volatility.
A notable instance of this was at the end of last week when silver prices unexpectedly jumped by 5%.
This surge occurred after the announcement that the Strait of Hormuz was completely open for the duration of the ceasefire an announcement that was later retracted.
The strait has since been closed again, which is thought to be in reaction to the ongoing blockade by the United States.
Uncertainty is also being introduced to the precious metals market by political developments in the US, according to O’Connell.
O’Connell maintains that the primary drivers of gold prices are the dollar and treasury yields, suggesting that it “may seem counterintuitive that gold has risen in price when geopolitical tensions appear to have eased, and vice versa.”
“These have been coming off when the news has been good and this has fed into bullish activity in the gold market, largely from a speculative bias,” she said.
Technical outlook: consolidation and plateau
Meanwhile, StoneX analyst Razan Hilal warned Wednesday that gold and silver are entering a technically fragile phase, consolidating near critical breakout levels, according to a Kitco.com report.
Gold is currently consolidating below critical resistance, showing patterns similar to the breakdowns seen earlier in 2026.
According to the analyst, gold’s failure to move back above the $4,880 mark raises the likelihood of renewed selling pressure if existing support levels start to erode.
Consequently, gold remains susceptible to further declines unless a definitive breakout occurs to signal a change in momentum.
According to Mykuliak, gold has been traded between two forces. Gold prices are currently constrained by opposing forces.
Downward pressure is exerted by real interest rates and the strength of the dollar.
Conversely, persistent official-sector buying and an unstable geopolitical landscape prevent any significant decline, she added.
“Over the next few months, a broad and bouncing range seems more realistic than an unambiguously oriented direction, and a new advancement will probably require a distinct change in the rates cycle or a more severe macro shock,” Mykuliak said.
The outcome is a plateau and not a collapse.