Should you buy gold now? Dan McEvoy Mon, October 12, 2026 at 4:54 AM EDT 5 min read GC=F -0.48% When you buy through links on our articles, Future and its syndication partners may earn a commission.
Gold is prized by some investors because of its qualities as a store of value and a hedge against global instability, but the tumultuous geopolitics of 2026 put the brakes on what had been a promising gold rally.
Gold enjoyed its best year since 1979 last year. The price of gold rose 64% through 2025, and kept going early in 2026, hitting an all-time high of $5,595 per troy ounce on 29 January.
But despite its safe haven appeal, the gold price fell after war broke out in Iran at the end of February – and it hasn't recovered since.
"Gold's recent volatility is a reminder that even traditional safe havens can be buffeted by shifting interest rate expectations and changing geopolitical risks," said Susannah Streeter, chief investment strategist at wealth manager Wealth Club.
Between 27 February, the last trading day before the Iran war started, and 9 October, the price of gold fell 20.5%.
That fall represents "the unwind of a move that had got ahead of itself", according to Giles Maber, managing director and head of UK at gold dealer Sharps Pixley, but he adds that it is "a correction in a bull market, not the end of one".
Higher interest rates and investors' searching for sources of capital have added downward pressure to gold prices throughout the year, but most experts view the structural foundations of last year's gold rally as still in place.
Gold prices are being weighed on by higher US interest rate expectations in the wake of the conflict. The Federal Reserve (Fed) – the US's central bank – had been engaged in a steady rate-cutting cycle in the run-up to the war, but the inflationary shock that followed has stalled this trend.
The Fed held rates steady at its April, June and July meetings, before raising rates by 25 basis points in September. Higher interest rates are negative for gold's price performance.
During August and September, rising global bond yields added further downward pressure to gold prices. "Every basis point [rise in government bond yields] widens the opportunity cost of holding metal that produces no income, and the World Gold Council's sensitivities put a 25 basis point move in the ten-year [US government bond] at roughly 1.75% on the gold price," said Maber.
Research from physical gold custodian BullionVault suggests that precious metals investors believe interest rates are currently acting as the primary driver of gold price movements.
In BullionVault's latest investor survey of 953 precious metals investors, conducted between 27 June and 7 July, 28% said they think monetary policy will have the biggest impact on precious metals prices in the second half of 2026.
"That's quite a shift in thinking from the past two years, when Trump's election campaign, victory and return to the White House threw geopolitics into the spotlight," said Adrian Ash, director of research at BullionVault. "Gold has long been seen as the asset that rallies on crisis, yet investors today say it's monetary policy that matters most."
On average, the survey's respondents predicted that gold prices would rise to $4,665 by the end of the year.
"Rather than seeing [the recent pullback] as evidence that bullion has lost its safe-haven appeal, most simply see investors banking profits after a remarkable run, alongside markets adjusting to changing expectations for monetary policy," said Ash.
The big question is how this affects the investment thesis for gold, particularly its status as a safe haven.
While short-term headwinds like a stronger dollar and higher bond yields have worked against gold prices, longer-term structural drivers that have driven the price of gold higher remain intact.
"I don't think that, behaviourally, gold is broken," said Nitesh Shah, head of commodities and macroeconomic research at asset manager WisdomTree. "If gold is supposed to be a highly liquid asset, then it's doing its job."
The gold landscape today is characterised, relatively speaking, by broader sources of demand than in the past: Chinese insurance companies and Indian pension funds have become eligible gold buyers since the start of 2025, while the rise of gold-backed tokens like Tether Gold mean that digital asset managers are now buying up gold in large quantities.
All of that suggests that the recent selloff could constitute a buying opportunity for would-be gold investors.
"When prices fall this much, it's a good time to buy, especially if you were considering buying in the months prior to that," said Shah.
Rather than focusing on relatively short term price movements, it might be sensible to concentrate on the role gold could play in the balance of your investments.
"Gold is a hedge against systemic risk, and you don't buy insurance because the premium has fallen; you buy it because you want protection when you need it," said Sharps Pixley's Maber. "The more useful question for investors is therefore not whether gold is cheaper today, but whether [you] hold the right proportion of it. For those who remain under-allocated, a pullback provides a more attractive entry point than they had in January."
One of the most compelling arguments for investing in gold is the diversification that it can offer to a portfolio.
"When bond yields stand at higher levels, shares and fixed income investments tend to track each other higher and lower," says Tom Stevenson, investment director at Fidelity International. "That reduces the incentive to own a mixture of both bonds and shares. And it means that investors need to look further afield, into commodities and property, to gain that portfolio balance."
Gold, by contrast, has "low-to-negative correlation to equities", according to Raymond Backreedy, chief investment officer at Sparrows Capital.
An allocation to gold within a portfolio can therefore act as a source of diversification during certain market conditions.
When building multi-asset portfolios, "we typically allocate 3-10% [to gold] using the gold ETCs available on the market, depending on user case and overall percentage allocated to the defensive asset class", said Backreedy.
