【Iran Crisis】DBS: Gold prices expected to continue fluctuating in the short term due to Middle East conflict, maintaining year-end target of $6,250

SocialAnxietyStaker · 2026-03-24T06:16:08+00:00

International gold prices have recently declined significantly, with market concerns about stagflation putting pressure on gold. DBS Private Bank expects gold prices to be supported by geopolitical uncertainty and central bank demand, maintaining its year-end target of $6,250 per ounce. While short-term volatility remains present, the outlook for a long-term recovery in the gold market is positive.

SocialAnxietyStaker

2026-03-24 06:16:08

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International gold prices have recently experienced a significant correction, dropping from nearly $5,600 per ounce at the end of January by more than 20%, entering a “technical bear market.” However, DBS Private Bank (Hong Kong) North Asia Investment Strategy Team Vice President Lam Tsz-hin still has insights on the gold outlook. He admits that current market concerns about stagflation are weighing on gold prices, but believes various support factors will benefit gold, maintaining this year’s target of $6,250 per ounce.

Investors Worry About Stagflation Risks

He stated that the recent correction in gold prices is mainly due to ongoing conflicts in the Middle East, which have led gold to digest the possibility of prolonged conflict. Additionally, investor concerns about stagflation are rising, and expectations that the Federal Reserve may raise interest rates this year are also putting pressure on gold prices.

“Gold was previously one of the market’s ‘de-dollarization’ flagship assets, but now there is a trend of closing positions; combined with gold’s relatively low market liquidity, profit-taking and position reduction can lead to higher volatility.”

He predicts that as the Middle East conflict continues to evolve, gold prices are likely to remain volatile in the short term. However, central banks around the world still need to diversify foreign exchange reserves, and investors’ increased geopolitical uncertainty sustains the trend of allocating to gold. The rise in ETF holdings also indicates growing market interest in gold. Therefore, the bank maintains its target of $6,250 per ounce for this year.

Lam Tsz-hin also pointed out that high oil prices are keeping inflation pressures up, which may force the Federal Reserve to delay interest rate cuts by a quarter. However, if the global economy is affected, authorities might need to “reverse course” and cut rates to stimulate the economy. As a result, they will continue to adopt a barbell strategy and recommend clients increase defensive positions in their portfolios this season.

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