Gold prices fell sharply on Monday, dropping 1.6% to $3,268 per ounce, extending a broader decline of more than 5% since the precious metal hit a record high of over $3,500 on April 22. The downturn comes as traders reassess the recent rally, which some believe may have been overextended.
According to data from the Commodity Futures Trading Commission, hedge fund managers in New York have slashed their net long positions in gold futures and options to the lowest level in 14 months. Still, many analysts and wealth managers remain confident in gold’s long-term potential, citing deepening geopolitical and economic tensions—particularly between the United States and China.
“We’re witnessing a strategic decoupling,” said Nigel Green, CEO of deVere Group. “What began as a tariff dispute is morphing into a full-scale economic and geopolitical confrontation.” Green believes that under current conditions, gold prices could surge to $5,000 per ounce or higher in the years ahead.
Those conditions include rising tariffs, increased restrictions on technology exports, and growing fragmentation of capital markets between the US and China. President Donald Trump recently reinforced his tough stance, rejecting any delay to new “reciprocal” tariffs, further dampening hopes for a near-term resolution to the trade conflict.
Frank Holmes, CEO of US Global Investors, sees gold climbing even higher—to $6,000—before the end of Trump’s current term. Holmes points to a broader restructuring of the global financial system, driven in part by a trend of de-dollarisation and record levels of gold accumulation by central banks, particularly in China.
“The global economy is undergoing a structural reset,” Holmes said. “This isn’t a bubble. It’s a fundamental shift in how wealth is stored and protected.”
Adding to the volatility is domestic political uncertainty in the US, including Trump’s public criticism of Federal Reserve Chair Jerome Powell and concerns about the Fed’s independence. Adrian Ash, director of research at BullionVault, noted that gold tends to perform best when public trust in central banks erodes.
Even with Monday’s dip, gold remains significantly elevated compared to previous years and continues to hit record highs in other currencies, including £2,600 in the UK. The trend reflects not just a reaction to short-term news but a broader repricing of risk amid economic nationalism and rising structural inflation.
“We’re leaving behind the era of cheap, seamless global trade,” said Arun Sai, senior multi-asset strategist at Pictet Asset Management. “That means more inflation, weaker currencies, and a renewed focus on tangible assets like gold.”
As global markets grapple with these shifts, wealth managers are increasingly advising clients to treat gold not merely as a hedge, but as a core component of their portfolios. Despite the recent selloff, experts agree: gold’s long-term shine is far from fading.
