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’s sharp pullback in 2026 has rattled some investors, but VanEck portfolio manager Imaru Casanova is reminding the market that the long-term fundamentals remain firmly in place.

Despite a 25% decline from earlier highs, she argues that persistent inflation, high geopolitical tensions, and the prospect of lower real interest rates make the precious metal an attractive long-term play.

The year has tested the conviction of gold investors. After flirting with $5,600 per ounce in January, gold slid to around $3,943 by the end of June, a rollercoaster that reflected volatility in global markets.

Casanova noted that while the MarketVector Global Gold Miners Index dropped more than 15% in June and over 12% year-to-date, this weakness may present opportunity for patient investors.

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According to Casanova, much of the pressure on gold stems from a stronger U.S. dollar and persistent expectations that interest rates will stay high.

The heating conflict in Iran has added another layer of complexity, influencing oil prices, inflation expectations, and Federal Reserve policy signals.

As she put it, higher energy prices feed inflation, which keeps the Fed on pause, and in turn props up the dollar. That cycle, she said, has temporarily weighed on gold.

But even amid those headwinds, gold has held up comparatively well.

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Casanova pointed out that both gold and gold stocks have outperformed most major asset classes over the past year, underscoring the metal’s resilience in an environment dominated by uncertainty and volatility.

She cautioned, however, that investors must look beyond the market’s short-term jitters and stay focused on the bigger picture.

Casanova believes that the ongoing optimism in equity markets may soon be challenged by reality, particularly as geopolitics and inflation risks persist across the Middle East and Europe.

These global dynamics, she said, have not disappeared — they’ve merely faded into the background of investor sentiment.

A key point in her analysis is that gold doesn’t necessarily need a Federal Reserve rate cut to resume its rise. If the current “Fed on hold” environment stretches out longer, real interest rates could start trending lower naturally, even turning negative.

Such conditions historically provide fertile ground for gold rallies, and that could again play out in this cycle.

Casanova added that gold consistently plays a vital role as a portfolio diversifier, especially for investors seeking protection from systemic risks and runaway inflation.

Gold mining stocks, she said, can amplify those benefits by providing leverage to the underlying metal in upcycle environments.

Still, she balanced her optimism with caution. Rising real rates could once again challenge gold’s performance, and investors must respect the asset’s inherent volatility. Gold doesn’t generate income and, in certain conditions, may not perform as a perfect hedge.

Even so, historical data suggests that rate hikes are not always bad for gold. Casanova highlighted World Gold Council data showing that during 44 Fed rate hike decisions between 1997 and 2023, gold gained more than half the time on those very days.

Another major factor underpinning gold prices, she said, is aggressive central bank buying — a trend that has remained consistent and geographically diverse. Strong demand from Asia, in particular, has kept the market supported, with China and India continuing to lead physical gold purchases.

If Western investors return to the market in the same way they did in 2025, Casanova believes prices could rise significantly.

At the corporate level, gold miners are positioned to benefit the most once prices stabilize and trend upward. Casanova emphasized that gold producers have become far more disciplined in recent years, focusing on profitability, cash flow generation, and shareholder returns.

With average gold prices around $4,700 per ounce in 2026 and sector-wide all-in sustaining costs below $2,000 per ounce, margins remain exceptionally strong.

This strength gives miners a clear advantage in an otherwise challenging macro environment. They can not only sustain operations, but also grow production, pay dividends, and buy back shares. Many are entering the second half of the year with balance sheets that are cleaner and more capital-efficient than at any point in the last decade, Casanova observed.

Despite those positives, valuations across the gold mining sector remain low relative to historical averages. Current prices, she said, reflect overly conservative assumptions that fail to account for the existing gold price level and the sector’s financial health. This disconnect could offer shrewd investors an opening before the broader market catches on.

If investors begin rotating out of expensive, overbought sectors like technology and growth equities, Casanova believes gold miners could attract meaningful capital flows.

In her view, the conditions may be aligning for the next big move higher — and the smart money will recognize that before it shows up in the headlines.

For long-term investors, the recent volatility in gold prices is not a sign of weakness, but rather the kind of reset that often precedes new bullish momentum. The fundamentals driving gold — inflation, geopolitics, currency debasement, and central bank accumulation — remain intact.

It’s the patient investors, Casanova noted, who will be best positioned to benefit when the gold market turns upward again.

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.