In late January, gold hit an all-time high of $5,589 per ounce. Four months later, it is trading near $4,700, a 16% pullback in the world’s quietest asset. The trade everyone loved — central banks buying, retail investors stacking, ETFs sucking down inventory — has hit its first real speed bump of 2026.
Now the question is whether this is a healthy reset or the start of something worse. Both JPMorgan and Morgan Stanley think it is the former. JPMorgan’s research desk still sees $6,300 as a 2026 target, while Morgan Stanley expects “primary hedge” status to drive prices higher into year-end.
The retail investor question is sharper: with bitcoin at $80,000+, US tariffs adding inflation, and the dollar wobbly, is gold still the best hedge in your portfolio, or is the easy money gone?
Three forces converged. First, the dollar firmed in March and April as the Federal Reserve held rates. Second, profit-taking from retail buyers who entered late in 2025 hit the tape. Third, bitcoin’s rally above $80,000 redirected speculative flows that previously chased gold.
None of these forces argue for a sustained collapse. Central bank buying has not slowed materially, inflation is rising again, and geopolitical risk has not improved. A 16% pullback after a 50% run is closer to a normal pause than a structural top.
JPMorgan’s $6,300 target rests on three pillars: continued central bank diversification away from the dollar, persistent inflation above 3%, and a Federal Reserve under political pressure to cut rates. If any two of those play out, gold is likely to retake its January highs.
Silver, which often follows gold with a lag, is the more aggressive bet. Bank of America’s commodities desk sees silver topping out between $135 and $309 in 2026, an enormous range that reflects how volatile the metal can be in late-cycle gold rallies.
Most diversified portfolios should hold 5% to 10% in gold and other precious metals. If you are already there, the right move is to rebalance rather than chase. If you are underweight, dollar-cost averaging into a low-cost ETF over the next three to six months catches any further pullback without trying to call the bottom.
Avoid leveraged gold ETFs, futures, and miner stocks for the bulk of an allocation; they amplify volatility without proportionally improving the hedging characteristic. Physical bullion is fine if you want it, but it carries storage costs and dealer spreads that erode returns over time.
Gold is trading near $4,700 per ounce in mid-May 2026, after peaking at $5,589 in late January.
A firmer dollar, profit-taking, and competing flows into bitcoin contributed. None of those signal a structural top.
JPMorgan’s research desk targets $6,300 per ounce, citing central bank demand and persistent inflation.
Low-cost ETFs are simpler, cheaper to trade, and avoid storage hassles. Physical bullion adds privacy and disaster-scenario insurance at a cost.
Some allocators are blending the two. Bitcoin is more volatile and has a shorter track record. Most diversified portfolios still treat gold as the primary store-of-value hedge.
5% to 10% is a common target for diversified portfolios. Higher allocations make sense for investors with specific inflation or geopolitical concerns.