Gold briefly dropped into a bear market and could continue to be volatile. Why it's a buy

Gold could continue to be volatile after its brief decent into a bear market, but it could also present a buying opportunity at this point. The precious metal has notched a quick succession of bearish milestones this week, a surprising move for an asset class many would consider a safe haven in the midst of an ongoing war. Spot gold tumbled more than 20% from its all-time high, dipping into bear market territory, before coming back above those levels. Gold futures dropped below their 50-day moving average for the first time since August 2025, suggesting the upward trend over the near term has broken for now. Gold miners, as measured by the VanEck Gold Miners ETF (GDX) , have fallen for nine straight sessions. A 10-day losing streak would be its worst on record. But the massive drop could present an entry point for many traders who felt they missed on gold’s exuberant rally last year. Notably, even after this year’s decline, gold remains one of the best performing assets of 2026. Gold futures is still higher by more than 5% year to date. Many investors expect gold’s advance will resume after this month’s volatility, as central bank buying of bullion, and a weakening U.S. dollar, cements the long-term bull case. “Once uncertainty around the US-Iran conflict dissipates, we would expect these demand factors to again become the dominant drivers of the gold price,” Bank of America Securities Lawson Winder said in a note. “Even in a protracted war scenario, we would expect gold to ultimately recover and perform well.” The bank expects gold can average $4,500 an ounce in the second quarter before rebounding to $5,750 in the fourth — with a target of $6,000. Spot gold was last at around $4,570. Over at UBS, strategists forecast an even steeper rise to $6,200 in March, June and September, before gold consolidates to $5,900 by the end of December. When the dust settles “And then, when the dust settles, you’ve seen it actually outperform most assets,” Alex Shahidi, Co-CIO at Evoke, a division of MAI Capital Management. Shahidi said gold allocation in portfolios could go up to 5%, up from virtually nonexistent in the past. UBS also said that a mid-single digit allocation would be appropriate for investors with an affinity for gold. “All of those uncertain and unknown variables, which are all significant, basically leads me to the conclusion if you really want to be well diversified. And diversified doesn’t just mean stocks and bonds. You have to own inflation-hedge assets. You have to own things like gold,” Shahidi said. “You want to be really diversified to protect yourself against a wide range of potential outcomes, probably greater risk of extreme outcomes.”