Gold Enters Technical Bear Market, Wall Street Remains Bullish: Long-Term Logic Unchanged, Pullbacks Present Buying Opportunities

The Middle East situation is shaking global commodity markets, but gold has failed to fulfill its traditional safe-haven role, instead falling alongside risk assets. Despite this, analysts from several Wall Street institutions view the current sell-off as a short-term dislocation and maintain a bullish stance in the medium to long term.As of press time, spot gold prices are trading at $4424.51/oz, down nearly 21% from the historic high of $5594.82 set in late January, technically confirming a bear market. The immediate catalysts for this decline are a strengthening dollar and a temporary easing of geopolitical tensions – Trump announced a postponement of the planned five-day strike on Iran's energy infrastructure, triggering some profit-taking by investors.Despite gold prices drifting further from the bull market blueprint previously envisioned by Wall Street, many market analysts still characterize this pullback as a buying opportunity rather than a trend reversal. Ed Yardeni, president of Yardeni Research, while maintaining his long-term forecast for gold to reach $10,000 by the end of the decade, has slightly lowered his year-end price target to $5,000 (from $6,000 previously). Standard Chartered Bank anticipates that gold prices could rebound to $5,375 within three months after the current deleveraging cycle concludes. BofA Securities also forecasts that the average gold price will rise quarter-over-quarter from the second to the fourth quarter of 2026, falling within the range of $4,500 to $5,750.Gold Falls with Risk Assets, Underlying Drivers EmergeGold's simultaneous decline with equities this time, defying market expectations of its traditional safe-haven properties, reflects deeper logic in its positioning.A research report from Citi on March 23rd indicated that momentum buying by retail and ETF investors over the past 12 months has been the core driver pushing gold prices steadily higher from $2,500/oz, while central bank gold purchases have remained largely stable over the last two to three years.This positioning structure, dominated by retail and momentum funds, makes gold highly susceptible to falling with risk assets during large-scale sell-offs. Citi cited historical data showing that gold has generally exhibited a pattern of falling first and then rising during the initial stages of significant market pullbacks, typically bottoming out before the stock market stabilizes, whether during the dot-com bubble burst, the 2008 financial crisis, or the pandemic shock.Justin Lin, an investment strategist at Global X ETFs, stated that the current sell-off is "driven by a combination of short-term interest rate sensitivity, portfolio rebalancing triggered by stock market declines, and a certain degree of market complacency regarding the Iran conflict," characterizing the decline as "an attractive buying opportunity for investors" and maintaining his year-end base forecast of $6,000/oz.Citi further pointed out that rising real interest rates and a stronger dollar have also weighed on gold prices. Coupled with passive selling by a large number of retail and ETF holders, this has led to a more extreme "pro-cyclical" correlation between gold and other risk assets than the historical average.Structural Factors Support Institutions' Mid-Term Bullish Stance on GoldThe recent sharp decline in gold prices has not shaken institutional analysts' optimistic outlook on its mid-term trend, with their bullish logic built upon several structural factors.Justin Lin, investment strategist at Global X ETFs, clearly stated that his bullish stance "does not rely on war-related risk premiums but is built on a broader backdrop of persistent geopolitical uncertainty, sustained central bank demand for gold, and stable inflows from Asian gold ETF investors." He added that as gold prices pull back, "the likelihood is high" for central banks to increase their purchasing power, potentially providing a floor for the market.Rajat Bhattacharya, senior investment strategist at Standard Chartered Bank, stated that the bank "maintains a constructive long-term stance on gold, supported by structural factors including strong demand from emerging market central banks and investors' need for diversification amid geopolitical risks." He also emphasized that a weaker dollar should once again support gold prices, and market expectations of eventual Fed rate cuts are a significant catalyst driving dollar weakness.Citi noted that with the Iran conflict significantly increasing global geopolitical and economic risks, and reducing the probability of the previously hoped-for "Goldilocks" scenario of stable U.S. interest rates and global growth, their mid-term outlook for gold has become more optimistic. Their base case (50% probability) predicts gold prices could rebound to $5,000/oz; if the conflict prolongs and leads to a stagflationary environment similar to the 1970s, the bullish scenario (30% probability) suggests gold prices could rise to $6,000 or even $7,000."Path, Not Price" for Buying Gold Dips, Long-Term Support Factors RemainAlthough the mid-term direction is relatively clear, institutions like Citi explicitly advise that the timing for buying gold depends on the evolution of geopolitical conflicts rather than simple price point judgments.Maximilian Layton, Citi's Global Head of Commodity Research, stated in a report that the "buy timing for gold depends on the path, not the price level." If the Iran conflict ends within the next four to six weeks, the firm suggests waiting for a general stabilization of risk assets and a bottoming out of the stock market before entering. If the conflict lasts longer, a decline in real interest rates or a technical momentum reversal in gold prices would be more reliable buying signals.Looking at a longer cycle, Citi emphasizes that the "friction" driving gold prices higher in the long term always exists – sovereign debt risks, concerns about the passive dilution of dollar credit, continued allocation of Chinese household savings into gold, and the diversification needs of emerging market central banks all constitute persistent forces supporting prices. Market forecasts from BofA Securities show a year-end target price for gold at $5,750/oz, with an average expected around $5,200/oz in the first quarter of 2027. The primary downside risk stems from a faster-than-expected de-escalation of the conflict.Overall, the deep pullback in gold has created a more attractive entry space for medium- to long-term investors. However, until the path of the conflict becomes clearer and risk assets stabilize, most institutions recommend maintaining a wait-and-see approach, acting according to market developments.