Gold has dipped below $3,900 an ounce, struggling to maintain its momentum as persistent inflation and the Federal Reserve’s commitment to high interest rates create a cooling-off period. Despite the recent 3% weekly slide, market participants are weighing whether this is a structural shift or merely a correction after record gains.
David Miller, Chief Investment Officer at Catalyst Funds, views the current price action as a temporary consolidation rather than a breakdown of the metal’s long-term bullish narrative. Gold saw significant appreciation in recent years, posting gains of 26% in 2024 and 63% in 2025. According to Miller, the current retreat represents a necessary pause following that extraordinary run.
The broader market remains caught between two opposing forces. While speculative traders react to short-term volatility, sovereign buyers—including central banks in China, Poland, and India—continue to view gold as a critical reserve asset. Miller identifies the global move toward de-dollarization as a primary megatrend that will likely sustain demand over the next two decades as nations seek alternatives to the U.S. dollar.
However, immediate obstacles persist. The Federal Reserve’s decision to maintain elevated interest rates, combined with geopolitical instability in Iran and potential energy market disruptions, threatens to keep inflation sticky. This environment forces central banks to maintain restrictive monetary policies, which inherently challenge non-yielding assets. Miller notes that while gold possesses a clear intent to rally, these macroeconomic headwinds currently act as a ceiling on price growth.
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