Gold prices have recently experienced a significant pullback from historical highs, and the short-term volatility has caused panic among many investors, raising questions about the future trend of gold. However, the well-known precious metals institution MKS PAMP (Swiss MKS Precious Metals Group) has clearly released optimistic signals, reminding the market not to judge this round of short-term selling as the end of the long-term bull market for gold.



In her mid-year outlook report, Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, maintained her core forecast of an average spot gold price of $4,500 per ounce by 2026. She clearly stated that the gold market is moving away from its previous irrational and rapid surge and is gradually entering a more stable and sustainable long-term bull market. This market shift is not a trend reversal, but rather a healthy adjustment after the market bubble has burst, laying a solid foundation for a steady rise in gold prices going forward.

Meanwhile, this globally renowned precious metals refining institution has provided a clear forecast for the gold price range this year, predicting that gold will mainly fluctuate and consolidate within the range of $3,800 to $5,000 per ounce in 2026. The institution also maintains its highest bullish target of $5,800 per ounce for the year, believing that potential variables such as renewed escalation of geopolitical conflicts and sudden global upheavals still provide sufficient impetus to push gold prices to new historical highs.

In her report, Nicky Shiels emphasized, "The long-term bullish logic for gold has not collapsed." She predicts that as the US economy gradually shows signs of slowing, market funds will refocus on various structural macroeconomic risks. Gold will experience a moderate, more sustainable, and more balanced upward trend in the second half of this year, completely breaking away from the previous extreme one-sided surge. Unlike the impulsive rallies driven by speculative trading in the past, this round of gold price increases will have a more solid market support logic.

Multiple long-term positive factors support gold prices, and the core fundamentals remain intact.

Looking at the long-term pricing logic of gold, Nicky Shiels points out that five core driving factors have remained stable and continue to support gold prices: the continued rise in fiscal deficits in various countries around the world, the long-term existence of inflationary pressures, the continued depreciation of many currencies, the continued reduction of dollar assets by central banks, the optimization of foreign exchange reserve structures, and the increasingly fragmented development trend of the global geopolitical and economic landscape.

The current geopolitical landscape, characterized by frequent black swan events and the normalization of sudden risks, has become the core theme supporting gold's attributes as a store of value and a safe haven, and is also the key to the continuous enhancement of gold's long-term value. The seemingly sudden market correction has not shaken these deep-seated fundamental logics.

Regarding the recent decline in gold prices, institutions have clearly stated that the weakness in gold prices was not caused by a deterioration in the fundamentals of gold. The core reason is the concentrated reversal of market investors' positions and the concentrated release of short-term speculative sentiment. After this round of deep adjustment, market sentiment has become excessively pessimistic, and bearish sentiment has been oversold, opening up room for market recovery.

Nicky Shiels estimates that the current fair value of gold is approximately $4,000 per ounce. After a large-scale exit of speculative funds and the full clearing of market bubbles, the current gold price is nearing the bottom of this correction, with extremely limited downside potential. Retail investors have largely exited the market, Commodity Trading Advisors (CTAs) have established substantial short positions, and gold ETF holdings continue to shrink. The market's negative factors have been largely cleared, creating favorable market conditions for gold prices to stabilize, rebound, and gradually recover.

Short-term monetary policy is under pressure, but limited long-term constraints do not alter the upward trend.

While maintaining a long-term optimistic outlook, Nicky Shiels also objectively pointed out the biggest short-term suppressive factor for gold – the direction of the Federal Reserve's monetary policy. The hawkish comments from the new Fed Chairman, Kevin Warsh, could push real interest rates to remain high and the dollar index to continue strengthening. This short-term macroeconomic variable will temporarily limit the upside potential of gold prices, keeping the short-term gold market in a volatile and weak pattern.

However, the institution also emphasized that the Federal Reserve's tightening policy space has long been severely constrained by the large scale of US debt, and the sustainability and intensity of policy tightening are very limited. With continuously rising US debt interest costs, a prominent fiscal-driven economic structure, and various political pressures, it is difficult for the Federal Reserve to initiate a new round of sustained interest rate hikes.

In the long run, real market yields will be constrained within a reasonable range and are unlikely to rise sustainably. As current short-term negative macroeconomic factors gradually subside and the constraining effect of real interest rates weakens, precious metals such as gold will regain valuation support and begin a recovery and upward trend.

Regarding this round of market correction, Nicky Shiels summarized: "This round of gold price correction has completely reset the market's position structure and extreme sentiment, but it has not changed the core structural logic of gold's long-term rise. The underlying support of the gold bull market remains solid."