What gold’s past bull runs tell us about where price could go next
Precious metals remained in recovery mode on Wednesday morning, with prices rising off the back of a historic sell-off. By 3:45 a.m. ET, spot gold was edging toward a rise of 3%, settling at around $5,079.4 an ounce. New York gold futures jumped 3.3% to $5,093.80. XAU= 1Y line Gold price Gold — typically viewed as a safe haven asset — has had a stellar 12 months, gaining 66% over the course of 2025 and extending those gains into early 2026. Geopolitical tensions, unpredictable trade policy and concerns over the independence of the Federal Reserve all supported prices. However, the bull run was derailed on Friday when gold prices fell almost 10%, with the downward pressure rippling through the wider precious metals markets, taking silver, palladium and platinum significantly lower. The sell-off, sparked by Kevin Warsh’s nomination as the next Federal Reserve chair, continued into Monday’s session, but by Tuesday, spot gold showed signs of recovery — gaining more than 6% to settle at about $4,946.81 an ounce. Read more Gold and silver rebound, pulling global mining stocks and precious metal ETFs higher Silver plunges 30% in worst day since 1980, gold tumbles as Warsh pick eases Fed independence fear Ray Dalio warns the world is ‘on the brink’ of a capital war In the wake of the volatility, however, many market watchers said they continue to see upside for gold, viewing last week’s sell-off as a temporary pullback rather than an end of the bull market. In a note on Monday, AJ Bell’s Investment Director Russ Mould said gold is currently in the throes of its third major bull run since 1971 — and noted that both of the previous bull markets had “witnessed several major pullbacks.” The 1971 to 1980 bull market — which began with President Richard Nixon withdrawing the U.S. dollar from the Gold Standard and was followed by a rising U.S. deficit, oil shocks and surging inflation — saw gold “motored” from $35 an ounce to $835 an ounce at its 1980 peak, Mould said. During that period, gold prices also fell multiple times, with the longest “correction” lasting 105 days, and the sharpest resulting in a 19.4% price decline, according to data from AJ Bell and LSEG. After a period of “hibernation,” gold began another bull run in 2001, winning over “a new generation of investors who sought refuge from the ultra-loose monetary policies that followed the bursting of the … telecoms bubble and then the Great Financial Crisis of 2007-09,” Mould said. During the 2001 to 2011 bull run, AJ Bell’s data showed that there were five price corrections, each leading to price declines of up to 16%. The current bull run, which Mould pins as beginning in 2015, had experienced five corrections before Friday’s pullback. “A swoon of more than 20% caught some bulls off guard in 2022, as the world emerged from lockdowns and 10%-plus corrections in each of 2016, 2018, 2020, 2021 and 2023 warned that volatility was never far away,” Mould said. “Bulls of precious metals may therefore be tempted to argue that this sudden dip is a chance to buy more, since geopolitical uncertainty, sticky inflation and galloping government debts, form the bedrock of the investment case for gold in particular, and none of those issues are any different now from the end of last week.” George Cheveley, a portfolio manager in the Natural Resources team at global investment management firm Ninety One, told CNBC on Tuesday that factors that have historically supported gold prices remain intact. “From a historical perspective, gold’s current strength looks more consistent with a late-cycle environment than the early stages of a speculative rally,” he said. Cheveley added, however, that one key additional factor is present in the current cycle. “A notable difference in this cycle is the scale and persistence of central bank demand, which has become a more important driver of the market than in previous episodes,” he said in an email. “That provides a degree of structural support that has historically been absent at comparable points in the cycle.” Central banks’ net purchases of gold fell to 328 tons in 2025, down from 345 tons the previous year, according to research from the World Gold Council. But Cheveley said the broader backdrop will continue to build momentum for the yellow metal. “Looking ahead, history suggests gold can remain resilient even through periods of volatility, particularly if real yields remain compressed and uncertainty around growth, debt and geopolitics persists,” he told CNBC. Strategists at investment banks also said on Tuesday that gold, typically seen as a safe haven investment, maintained support from wider macroeconomic and geopolitical uncertainty. “Despite screens flashing ‘overvalued,’ a certain amount of premium to gold’s fair value (c. $4000 on our model) looks durable, suggesting gold is not a bubble,” strategists at Barclays said in a note. Past cycles showed “misalignments to fair value can persist for years,” they added, noting that inflation, questions about U.S. policy and decline of the dollar supported elevated pricing. In a Monday note titled “Not the end,” the Chief Investment Office at UBS noted that the sell-off on Friday marked gold’s most substantial one-day loss in 13 years. “Investors are considering whether this event marks the end of gold’s bull market or signals a move into a more unpredictable period,” they said. “Gold bull markets typically don’t conclude simply because fears diminish or prices become too high — they end when central banks establish their credibility and pivot to a new monetary policy regime. Since Warsh hasn’t demonstrated the same credibility as [former Chair Paul] Volker, we don’t believe this is the end of gold’s bull market.” The implementation of stringent monetary policies by Paul Volker in 1980, “effectively restored Fed credibility,” leading to significantly higher real interest rates and an extended period of dollar appreciation,” according to analysis from UBS. “Throughout past price cycles — the 1970s, the 2000s, and after 2020 — the gold price tended to increase whenever investors doubted Fed policymakers’ ability to maintain the dollar’s real value,” the lender’s strategists said. “Prices fell back when trust was partially regained, but bull cycles only ended once full confidence returned.” The U.S. dollar index, which weighs the greenback against a basket of major rivals, has declined more than 10% over the past year, amid concerns about central bank independence and an unpredictable policy mix coming from the White House. “Our analysis indicates that gold is currently in the mid-to-late stage of its present bull market, moving from a consistent upward trajectory to one reaching new peaks but with intermittent drawdowns of 5-8%,” UBS’s team said in their note. “Importantly, the typical factors historically associated with the conclusion of gold’s bull market — sustained elevated real interest rates, a structurally stronger U.S. dollar, improved geopolitical conditions, and fully re-established central bank credibility — have not yet materialized, in our view.” UBS forecasts that gold will hit $6,200 by next month, before falling to $5,900 by the end of the year.
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