By Jules Rimmer
Time to add exposure to selected gold stocks, says Barclays
Photo by KRISTIANTO PURNOMO / AFP via Getty Images
Having fallen by almost a quarter since the Middle East conflict escalated, gold (GC00) has failed to live up to its reputation as a haven during geopolitical turbulence. However, with prices not far from Barclays's fair value estimate of $4,150 per troy ounce, a rebound now looks likely.
Barclays's cross-asset research team recommended mining stocks, such as Endeavour Mining (UK:EDV), Hochschild Mining (UK:HOC), Fresnillo (UK:FRES), Newmont (NEM) and Agnico Eagle Mines (AEM).
The research note, published Monday by the Barclays team led by Lefteris Farmakis and Themistoklis Fiotakis, answered the question of why gold underperformed so badly during the recent upheaval. They pointed to a combination of a stronger dollar DXY, an equity market attracting risk capital and a crowded positioning that probably exacerbated the scale and speed of the selloff.
Barclays called these factors temporary, saying that gold's structural drivers - persistent inflation, policy uncertainty and continued reserve diversification - are intact. Those drivers will reassert themselves as geopolitical stress dissipates, they said
Barclays's gold-price forecasts for 2026 and 2027 remain at $4,791 an ounce and $4,900 an ounce, but the team said there may be some short-term mark-to-market downside in their calls right now.
Barclays calculated that every percentage-point increase in inflation gives gold a 5% uplift, meaning the inflationary impulse of the recent energy shock should be supportive.
Gold's 26% collapse from its January peak to its June trough reflected a normalization of real interest rates (the difference between bond yields and inflation), markets pricing out the possibility of Fed rate cuts (FF00) in 2026 and the short-term appeal of rising stocks detracting from gold's investment case, they said.
Gold is now largely in line with the levels implied by real rates.
The team estimated that the jump in the dollar index and the 10% rally in the S&amp;P 500 implied a 10% drop in gold prices, while the rest of the decrease was from the unwinding of crowded and leveraged positions. Selling by the Russian and Turkish central banks to prop up the ruble and the lira (USDTRY) also contributed to the weakness.
Barclays emphasizes that gold's key structural drivers - U.S. CPI and central-bank buying - are &#34;slow-moving variables whose influence accumulates over time.&#34; This is why they failed to bolster gold much since the Iranian crisis began.
Barclays team said it anticipates a reassertion of the dollar's downward trend, a return to consistent central bank buying and sustained upward pressure on inflation from higher energy prices.
Central bank gold purchases (value terms)
The report concluded that, &#34;recent price gyrations notwithstanding, if there is a period when gold ought to be trading at a premium, it is now.&#34;
-Jules Rimmer
This content was created by MarketWatch, which is operated by Dow Jones &amp; Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
06-15-26 0820ET

NWMX

Barclays recommends buying gold mining stocks like Newmont and Agnico Eagle, anticipating a rebound as gold prices near fair value. The bank attributes recent underperformance to temporary factors like a strong dollar and crowded positioning, while structural drivers such as inflation and central bank buying remain intact.

Gold's correction could lead to a rebound. Barclays recommends these stocks.