Gold’s next big move is coming: Should you buy before prices break out again?
The answer from market experts is increasingly leaning toward yes, but with a clear investment strategy rather than short-term speculation
31 July, 2026
TT
16
Gold has long occupied a unique position in global markets, part safe haven, part inflation hedge and part store of wealth during periods of uncertainty. But with prices hovering near historic levels, a major question is now dominating investor conversations: Should consumers buy gold now?
The answer from market experts is increasingly leaning toward yes, but with a clear investment strategy rather than short-term speculation.
After reaching unprecedented highs earlier in 2026, gold prices have entered a period of consolidation, with investors weighing competing forces including inflation trends, Federal Reserve policy, movements in the US dollar, geopolitical tensions and concerns over global economic growth.
According to commodity analysts, gold is currently trading within a broad range of around $3,950 to $4,200 per ounce, reflecting a market caught between opposing signals. Softer inflation data and expectations around monetary policy have supported bullion, while higher energy prices and uncertainty over interest rates have limited further gains.
Read more-Concierge service: Dubai unveils home delivery for gold and jewellery purchases
Despite the recent cooling in momentum, analysts argue that gold’s fundamental investment story remains intact. Continued central bank purchases, stable exchange-traded fund holdings and demand from Asian investors are providing structural support for the precious metal.
The latest data from the World Gold Council (WGC) highlights this resilience. Total gold demand remained steady year-on-year in the second quarter of 2026 at 1,269 tonnes, while first-half demand increased 2% compared with the same period last year, reaching an estimated 2,522 tonnes worth approximately $380 billion.
For investors deciding whether to enter the market, the message is clear: gold may no longer be a simple reaction to inflation fears, but it continues to serve as a portfolio diversifier during uncertain economic conditions.
Gold’s rally slows, but investment demand remains strong
Gold’s spectacular rise earlier in the year created strong investor interest, but the second quarter brought a period of adjustment.
The World Gold Council’s Q2 2026 Gold Demand Trends report showed that investment demand through gold-backed exchange-traded funds (ETFs), bars and coins declined to 262 tonnes during the quarter as prices moved lower from record levels.
The decline was largely driven by 45 tonnes of ETF outflows, although ETF demand for the first half of the year remained slightly positive at 18 tonnes.
Meanwhile, physical investment demand proved more resilient. Bar and coin demand fell only 3 per cent year-on-year during the second quarter, while first-half demand remained 21% higher than the previous year, supported by strong buying activity in the opening months of 2026.
The over-the-counter (OTC) market also remained a significant source of demand, reaching 327 tonnes in the second quarter and 571 tonnes during the first half of the year, supported particularly by Asian investors.
Louise Street, Senior Markets Analyst at the World Gold Council, said gold’s recent price correction did not weaken its broader appeal.
“Gold’s early-year rally reversed in the second quarter, with prices consolidating after correcting from record highs,” Street said. “But the market remained well supported, reflecting gold’s established role as a diversifier and store of value.”
She added that continued central bank buying and OTC investment helped push total gold demand higher during the first half of the year.
Central banks continue buying gold as investors seek protection
One of the strongest arguments supporting gold’s long-term investment case is the continued appetite from central banks.
During the second quarter, central banks and official institutions added 289 tonnes of gold to reserves, marking a 62 per cent increase compared with the same period last year.
The World Gold Council’s Central Bank Gold Reserves Survey also found that 45 per cent of respondents expect to increase their gold reserves over the next 12 months, reinforcing the metal’s importance in global reserve strategies.
For individual investors, central bank activity is closely watched because official purchases often indicate confidence in gold as a long-term asset.
Unlike stocks, bonds or cash holdings, gold does not generate income. However, investors often use it as a form of protection against currency weakness, financial instability and geopolitical shocks.
This has become increasingly relevant as markets navigate uncertainty around inflation, government debt levels and monetary policy decisions.
Saxo: Gold is looking beyond inflation concerns
According to Ole Hansen, head of Commodity Strategy at Saxo Bank, gold’s current behaviour suggests investors are considering broader economic risks beyond immediate inflation pressures.
Saxo analysts noted that gold remains trapped within the $3,950–$4,200 range as investors debate whether inflation risks or slowing economic growth will become the dominant market theme.
Recent US inflation data briefly pushed gold above the $4,100 level as traders reduced expectations of aggressive Federal Reserve tightening.
However, renewed strength in oil prices and rising tensions in the Middle East quickly shifted market attention back toward inflation risks and potential pressure on monetary policy.
Gold later slipped closer to the $4,000 mark, remaining inside its established trading range.
Saxo said the market’s uncertainty reflects a clash between two competing forces.
Traditionally, higher oil prices can hurt gold because they may push inflation expectations higher, increase bond yields and strengthen the US dollar. Higher yields can reduce the appeal of gold because the metal does not provide interest income.
However, analysts noted that investors may now be looking beyond the immediate inflation impact of higher energy prices.
A prolonged energy shock could weaken economic growth by increasing costs for consumers and businesses. In that scenario, gold’s defensive qualities could become more attractive.
Weaker Dollar and Fed uncertainty keep gold supported
Recent movements in the US dollar have also played a key role in gold’s performance.
Reuters reported that gold gained after the dollar weakened and US inflation data showed easing price pressures. Spot gold rose to around $4,109.94 per ounce, while US gold futures also moved higher.
A weaker dollar typically supports gold because it makes bullion cheaper for buyers using other currencies.
The latest US Personal Consumption Expenditures (PCE) inflation report showed prices falling 0.1 per cent in June, broadly matching market expectations.
However, analysts warned that inflation risks remain sensitive to developments in energy markets and geopolitical tensions.
Bart Melek, global head of Commodity Strategy at TD Securities, said the inflation environment had improved but warned that oil prices remained a concern.
“Inflation is maybe a little contained right now, but that might very easily change if we continue to see instability in the Middle East,” Melek said.
The Federal Reserve’s policy outlook remains another major factor influencing gold.
The Fed kept interest rates unchanged in the 3.50 per cent-3.75 per cent range, but policymakers provided limited clarity about future moves.
Because gold does not pay interest, expectations of higher rates often weigh on prices. Conversely, expectations of lower rates or slower monetary tightening can support demand.
Should consumers buy gold now? Experts say build exposure carefully
For consumers considering gold today, analysts suggest focusing on allocation rather than timing the market perfectly.
Gold’s current price levels mean investors should avoid treating the metal as a quick-profit opportunity. Instead, experts view gold as a strategic asset that can help balance portfolios during uncertain periods.
The argument for buying gold is based on several factors:
- Continued central bank purchases
- Concerns over currency depreciation
- Geopolitical uncertainty
- Potential economic slowdown risks
- Gold’s historical role as a store of value
However, investors should also recognise the risks.
Gold can experience sharp corrections, especially if inflation falls faster than expected, interest rates remain elevated or the US dollar strengthens significantly.
Saxo Bank noted that a sustained move above $4,200 could signal investors are shifting focus from inflation concerns toward broader economic risks.
Meanwhile, a decline below $3,950 could indicate that higher bond yields, inflation worries and dollar strength have regained control of the market narrative.
Jewellery demand falls as high prices change consumer behaviour
While investors remain interested in gold, traditional jewellery demand has faced pressure because of elevated prices.
The World Gold Council reported that jewellery demand declined 17 per cent year-on-year in the second quarter as consumers purchased smaller quantities and shifted toward lighter products.
However, the value of jewellery demand remained strong, rising 22 per cent during the first half of 2026 to $86 billion globally.
The trend highlights an important shift in gold consumption: buyers are becoming more selective, while investment demand is playing a larger role in the market.
The bottom line: Gold may still have a place in investor portfolios
Gold’s journey in 2026 has moved from explosive rally to careful consolidation. While prices near $4,000 may make some consumers hesitate, market experts argue that the investment case remains supported by powerful long-term trends.
The metal is no longer driven only by inflation fears. Instead, investors are watching a wider mix of economic uncertainty, monetary policy, currency movements and geopolitical developments.
For consumers asking whether they should buy gold now, the emerging market view is not about chasing prices or expecting immediate gains.
Instead, gold may be worth considering as a long-term portfolio diversifier, a financial asset designed not only to benefit from market stress, but also to provide stability when other investments face uncertainty.
As Saxo’s analysis suggests, gold is currently waiting for a clearer direction. But with central banks still buying and investors searching for protection against global risks, the world’s oldest store of value continues to command attention.
