BlackRock sees gold support intact despite near 30% drop from record, expects milder gains

Black Rock’s view backs the idea that gold’s correction has been driven by rates, not by fading long-term demand. Near-term direction depends mainly on real yields and the dollar. With markets pricing further Fed tightening, rallies are likely to be hard to sustain, and gold has tended to fall rather than rise as geopolitical risk lifts oil, inflation and hike expectations. Central bank buying offers some support on dips, but Black Rock expects that buying to slow from its recent pace. Silver remains the more cyclical and riskier of the two, more exposed to swings in industrial demand and growth expectations.

Black Rock says gold’s structural support from central banks is intact, but with real yields and the dollar working against it, investors should expect it to stabilise portfolios rather than repeat last year’s surge.

Gold’s long-term case is still intact after a sharp pullback from its January record, but investors should expect steadier, more moderate returns rather than a repeat of the past year’s surge, according to Black Rock.

Gold hit a record of around $5,400 an ounce on 29 January.

The decline has continued since, and gold now trades around $3,870, roughly 28% below the high.

As US growth rebounded, real yields rose and the dollar strengthened, the focus shifted, and gold lost ground along with digital assets.

Gold pays no income, so higher real yields and a firmer dollar raise the cost of holding it.

Since 2020, gold has returned about 2% on average in months when the S&P 500 fell more than 5%, while bonds were broadly flat.

It hit a record near $118 in January and now trades around $52, more than 55% below that peak, a reminder that its swings have historically been up to twice the size of gold’s.