Gold Price Outlook 2026: Westpac Sees Recovery Toward $4,600 Amid Market Pressure

Gold prices remain under pressure after a sharp pullback from January’s record levels. Gold has fallen more than 7% this month, with spot gold (XAU/USD) trading near $4,216, down from May’s peak above $4,770.

The decline comes as rising bond yields and expectations of higher interest rates reduce demand for non-yielding assets like gold. Higher real yields have made fixed-income investments more attractive for investors in recent weeks.

Westpac Forecasts Recovery Despite Short-Term Weakness

Westpac noted that gold’s recent weakness reflects tighter monetary conditions and inflation concerns linked to geopolitical tensions in the Middle East. The bank said gold has “corrected sharply from its January highs,” wiping out most gains made in 2026 so far.

Despite the downturn, Westpac still expects a recovery in the coming quarters. It forecasts gold averaging around $4,600 per ounce in the third quarter of 2026.

According to the bank, a period of lower volatility and easing real yields could help stabilize prices and bring back long-term investors.

Demand From Asia and Central Banks Supports Long-Term Outlook

Westpac also highlighted strong structural support from Asian demand and continued central bank buying. These factors are expected to provide a long-term cushion for gold prices even if short-term pressure continues in global markets.