DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Gold is closing the third quarter on a disappointing note after staging a solid recovery in August. A sharp increase in bond yields has weighed on the precious metal, which offers no yield to investors.

Persistent inflation pressures, falling bond prices and tighter global monetary policies have eroded gold’s gains. Even so, one market strategist believes the downside could remain limited through the final quarter of 2026.

Gold prices are on course to finish the third quarter with a 4% gain while maintaining critical support above $4,100. Prices nevertheless remain below last month’s highs, which came in just under $4,700 an ounce.

The selling pressure has coincided with a substantial rise in 10 year bond yields. Yields have climbed 87 basis points to 5.27%, their highest level in roughly 20 years.

Fawad Razaqzada, Market Analyst at FOREX.com, sees potential for gold to recover by year end despite the risks confronting the market. He pointed to the metal’s resilience during a period marked by unfavorable traditional macroeconomic forces.

“Gold spent much of the Q3 bouncing around $4,000 and $4,500, as volatility compressed with investors not sure whether to buy the dip as fiat currencies continues to lose value to inflation, or sell the metal short against a backdrop of rising US dollar and rising bond yields, mostly negative traditional macro factors,” he said.

Razaqzada said surging bond yields have increased the opportunity cost of owning gold, yet the pressure has not produced a more severe retreat. That relative stability supports his cautious optimism for the remainder of the year.

“Given gold’s ability to remain steady in what should otherwise have been a tough macro environment, the precious metal could have a shinier Q4. We are thus cautiously optimistic on the gold outlook for the remainder of the year.”

A potential agreement to reopen the Strait of Hormuz could also affect the outlook. Razaqzada said such a deal could cause central banks to delay or pause rate increases, creating conditions in which gold could thrive.

In the current environment, Razaqzada identified U.S. monetary policy as gold’s dominant driver. Markets continue to price in at least one additional rate increase before the end of the year, while questions remain about whether the Federal Reserve can control inflation.

“If investors lose faith in the Fed and its ability to control inflation or yields, then the dollar debasement trade could resurface and that could be positive for gold, silver and bitcoin , as well as currencies of countries with better fiscal discipline than the US,” he said.

Beyond interest rates and bond yields, central bank demand could provide another layer of support during the fourth quarter. Razaqzada expects purchases to remain strong and said further diversification into gold by major central banks cannot be ruled out.

“There are no major indications that demand for gold from central banks will ease in the final quarter of the year. If purchasing continues, we could see gold prices push higher as investors and speculators try to front-run central banks by increasing purchases via ETFs, spot and futures.”

Razaqzada added that further central bank buying could offset negatives such as continued strength in the U.S. dollar or yields. He also said the troubles in bond markets could encourage major central banks to move away from U.S. Treasurys and further diversify into gold.

From a technical perspective, gold faces near term obstacles but remains within a long term bullish uptrend, according to Razaqzada. He identified the $4,000 level as an important support area following the sharp rally that began there in early August.

“We saw gold stage a sharp rally away from the key $4,000 level, making this an important long-term support area. Since that rally in early August, gold has spent several weeks declining inside what appears to be a descending triangle pattern.”

Razaqzada described that pattern as a bullish continuation formation that requires a break above resistance for validation. Resistance sits near $4,400, making that price a pivotal fourth quarter level, with $4,500 and the area around $4,700 identified as subsequent objectives.

The August peak stood at $4,696, and acceptance above that level could strengthen the bullish technical case. From that perspective, Razaqzada said $5,000 would become the next obvious target.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.