Gold Prices Plummeted Sharply in March, Institutions Diverge on Future Trend

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　　[Comprehensive report by Global Finance Network] On March 31, gold prices edged higher, but spot gold has dropped by over 11% so far this month. Wayne Nutland, investment manager at Shackleton Advisers, told CNBC that the logic behind gold trading has changed over the past four years. Particularly from 2025 to early 2026, gold prices surged significantly, far surpassing increases seen in history.

　　"Bond yields and the US dollar have both risen, and in this context, gold has demonstrated its traditional inverse sensitivity to these indicators, leading to a decline," Nutland said. "At the start of 2026, gold prices remained high. Coupled with investors possibly wishing to take profits, this may have also intensified the downturn in gold prices."

　　Iain Barnes, Chief Investment Officer at Netwealth, stated that in recent months, the volatility of gold prices has doubled from historical levels due to increased participation from financial investors. Although the current macroeconomic and market backdrop is different from 2008, similarities exist; after the fundamentals of the US dollar and market sentiment shift, overly crowded commodity positions by investors could substantially amplify price fluctuations.

　　Goldman Sachs analysts stated in a report that they remain constructive on gold, believing that the market has re-priced the Fed’s monetary policy path, expecting either one rate cut or no cut this year.

　　"However, we still predict that gold prices will reach $5,400 per ounce by the end of 2026. This will be driven by ongoing central bank diversification, a normalization of current relatively low speculative positions, and the Federal Reserve delivering a 50 basis point rate cut as economists expect," said Goldman Sachs analysts. This is under a baseline scenario where the private sector neither continues to sell gold nor increases its allocations.

　　However, UBS precious metals strategist Joni Teves recently warned that the gold rally is about to end. Currently, the market expects the Fed to keep rates unchanged this year, which means there is little possibility for gold prices to rise further. At the same time, Teves added that gold cycles should roughly synchronize with the Fed cycle, so she anticipates that gold prices will gradually fall by the end of this year and continue downward over the next few years. (Wen Hui)

Editor: Zhu Henan