Gold remains in a broad consolidation phase as investors await greater clarity on interest rates and inflation, but the long-term bullish thesis remains intact.
Analysts note concerns over currency devaluation, potentially lower real interest rates, and, most importantly, the possibility that central banks may accelerate gold purchases again after this year’s economic slowdown. June 17 – Gold is holding near $4,300 per ounce after testing key support near $4,000. According to one market strategist, the precious metal remains in a broad consolidation phase as investors wait for more clarity on interest rates and inflation, yet the long-term bullish outlook remains unchanged. Tom Bruce, macro investment strategist at wealth management firm Tanglewood Total Wealth Management, said in a recent interview that he holds a relatively neutral stance on gold in the short term, but the long-term prospects for the precious metal remain optimistic. He described the current environment as one of the most difficult periods for gold investors to assess. He explained that gold’s surge to record highs earlier this year was initially driven by massive central bank purchases, as countries sought to diversify and reduce reliance on dollar-denominated assets, in addition to speculative momentum. However, that enthusiasm has faded considerably as investors shifted capital toward high-growth sectors such as artificial intelligence (AI) and semiconductor stocks. “The factors that pushed gold higher earlier this year appear to have shifted. Now, gold is mainly driven by traditional factors—interest rates,” he added. With geopolitical concerns easing and safe-haven demand failing to strengthen significantly, Bruce noted that gold has become increasingly sensitive to real interest rate expectations. While this creates uncertainty in the short term, he does not foresee a major collapse. “This is indeed a consolidation phase,” he said, describing the current market as an adjustment period rather than the beginning of a significant downtrend. Bruce added that after successfully holding key technical support near $4,000 per ounce, the gold market has absorbed a substantial amount of negative news. “Prices have fallen considerably and held the $4,000 support level,” he said. “If that level were broken, I would be more concerned.” Despite cooling investor enthusiasm, Bruce stated that he has not seen massive gold selling. Instead, many investors appear content to chase better-performing equity sectors while maintaining their existing allocations to the precious metal.Despite current low investor interest, he emphasized that the long-term bullish factors have not disappeared. Bruce pointed out that there are concerns over currency depreciation, the potential decline in real interest rates, and most importantly, the possibility that central banks may accelerate gold purchases again this year following the economic slowdown. “We should view this as a temporary pause in central bank gold buying. Overall, I believe there is still upside room for gold prices if demand recovers,” he said. “In my view, a resumption of central bank gold purchases could be the fastest path for gold prices to return to historical highs.” The World Gold Council’s (WGC) latest “2026 Central Bank Gold Reserve Survey,” released on Tuesday, also showed that 45% of surveyed central bank reserve managers expect to increase their gold holdings over the next 12 months, up 2 percentage points from the previous year and reaching a record high. Bruce expects gold prices to remain range-bound in the short term as the market assesses the Fed’s next moves. He explained that market expectations of a more hawkish monetary policy from the Fed may already be largely priced into current gold prices. “The possibility of a rate cut is extremely slim,” he said. “But any indication that they will keep rates unchanged this year — not even a cut, but simply holding rates steady — would still be a positive signal for gold.”
