After a sharp rally in gold prices, markets may be heading for a correction. Spot gold rose 0.3% to $3,392.29 per ounce on Monday amid ongoing geopolitical tensions between Israel and Iran.
However, US gold futures slipped by 0.2% to $3,410, and gold futures on India’s MCX were down 0.4% to ₹99,143 per 10 grams.
Citi Forecasts a Steep Fall in Gold Prices
A new report from Citi Research signals trouble ahead for gold investors. According to the forecast:
Gold may drop to $2,500–2,700/oz by the second half of 2026.
The surge in prices is expected to lose steam as global economic conditions improve and investment demand for gold weakens.
A likely interest rate cut by the US Federal Reserve may also reduce gold’s appeal as a safe haven.
This is significant as gold prices have surged nearly 30% in 2025, outperforming most other asset classes and drawing massive interest from retail investors.
Short-Term Correction Also Expected
Anuj Gupta, commodity expert, said that a short-term correction is highly likely due to:
Overbought conditions
Weakening physical demand
Easing geopolitical tensions
On June 16, gold prices dropped over 1% internationally after Iran signaled a willingness to de-escalate its conflict with Israel.
Experts caution that if a ceasefire between Iran and Israel is reached, gold could face further downward pressure.
What Should Investors Do?
With volatility on the horizon, investors are advised to:
Stay cautious with fresh gold purchases
Consider profit booking at higher levels
Monitor global cues and US Fed signals.
