Gold's Rebound Runs Into a Liquidity Wall as Forecasters Cut Their Sights
Published on 11/06/2026 at 09:20 | Editorial boerse-global.de
Gold bulls got a reminder this week that not every rally runs in a straight line. The metal slipped 1.0% to a spot close of 4,045.76 USD per troy ounce, giving back a slice of a recovery that had lifted prices 4.4% over seven sessions — a run that followed the October sell-off and the Democratic sweep in the US midterms.
The immediate culprit was a rebound in crude. Higher energy costs have revived inflation jitters and reinforced expectations that US interest rates will stay elevated for longer, chipping away at one of the pillars of the post-election advance: the bet on cooling price pressure. A firmer dollar added to the drag.
From Tailwind to Headwind in a Single Week
The reversal is sharp because the prior week's optimism rested on the opposite set of assumptions. Investors had latched onto hopes of a de-escalation in the Iran conflict, and after the Democratic victory they also priced in constrained fiscal spending and a lighter inflation impulse. That combination pushed the dollar and Treasury yields lower — and gold higher. Tuesday's oil move flipped the script.
There is a second, more mechanical force at work. Equity market turbulence has forced some investors to sell gold to cover losses and meet margin calls, draining liquidity from a market that was simultaneously drawing support from falling bond yields. The result is a two-channel tug of war: safe-haven demand presses yields down and cushions the metal, while forced deleveraging pulls bullion into the sell column. As long as that cash squeeze persists, the recovery stays vulnerable to further setbacks.
Should investors sell immediately? Or is it worth buying Gold?
The Demand Base Is Splitting in Two
Beneath the daily noise, the buyer base looks increasingly lopsided. Central banks have stepped up purchases markedly, according to the World Gold Council, and exchange-traded gold funds have recorded inflows. Against that, jewellery demand has softened and purchases of bars and coins have declined — a divergence that leaves the institutional bid carrying more of the load.
Goldman Sachs responded on Tuesday by trimming its targets. The bank cut its end-2026 gold forecast to 4,150 USD per ounce from 4,650 USD, citing an expectedly more restrictive US monetary stance, even as it acknowledged that central bank buying should keep providing a floor. For end-2027, the house now projects 4,800 USD, down from 5,400 USD previously.
BCA strategist Roukaya Ibrahim is more cautious still on the near term. In an assessment published Wednesday, she argued that gold looks technically oversold after the October rout — she flags 4,000 USD as critical support — but expects a sideways phase before any durable advance. Inflation and monetary policy, in her view, remain headwinds, and she sees a relatively firm dollar through the end of 2026. A more favourable macro backdrop could emerge in early 2027, provided the dollar and inflation both ease.
What Could Break the Stalemate
Ibrahim also warns that a renewed plunge in equities could trigger another wave of margin calls and the unwinding of leveraged positions, hitting gold in the short term. Longer-horizon private investors and central banks, she argues, remain the key supports — and private investment demand, rather than official-sector buying, could become the bigger catalyst.
Gold at a turning point? This analysis reveals what investors need to know now.
The next test arrives with Friday's US payrolls report. The Dow Jones consensus cited by CNBC points to 59,000 non-farm jobs added in October, up from 29,000 in September, with the unemployment rate seen at 4,2%. Softer hiring and wage figures would temper expectations for further tightening and give the gold recovery room to breathe; robust numbers would do the opposite, lifting rate expectations and the dollar.
How much the political shift in Washington actually changes fiscal policy depends on negotiations between Congress and the Trump administration — meaning the bull case for gold rests less on politics than on whether the relief in inflation, yields and the currency holds.
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