Studio Financial Holdings, Inc. released its latest gold monitoring report, maintaining its base case forecast (50% probability) for the gold price to reach $4750-$5500 per ounce by year-end. The firm believes the gold bull market is still in the middle of its cycle. The bank has lowered the probability of its bull scenario, where gold reaches $5500-$6250 per ounce, from 35% to 30%. However, it expects the $4000-$4100 level to provide strong market support and anticipates that the gold price will retest its historical highs before 2027. Studio Financial Holdings described the volatility in the gold market in the first quarter of 2026 as "pressured but not out," noting that an oil price shock could present temporary headwinds for gold but might further strengthen structural positive factors in the medium term. The "grey swan" tail risk highlighted by the firm in January of this year—namely, crude oil prices breaking above triple digits—has now materialized. Gold has not been immune to the cross-asset market chain reaction triggered by this round of energy price shocks. Although geopolitical risks typically boost gold investment demand, the macroeconomic tailwinds that supported the gold price between January and February, including a weaker US dollar, market expectations for Federal Reserve interest rate cuts, and declining real interest rates, have reversed sharply. The impact of this reversal has outweighed the market's safe-haven demand for gold. The firm believes that if the conflict escalates further and drives Brent crude prices above $150 per barrel, the direction of Federal Reserve policy and the US dollar exchange rate could put additional pressure on the gold price; simultaneously, this scenario would also increase the risk of an economic recession or stagflation. On the other hand, if oil prices return to a normal range of $80-$85 per barrel, the gold price could quickly rebound to levels above $5000 per ounce. Some structural factors supporting the gold market's upward trend from 2024 to 2025, particularly the ongoing expansion of sovereign debt and fiscal deficits, may worsen due to the current conflict. Meanwhile, China is actively entering the market, taking advantage of the gold price pullback. Will Western investors follow suit? This month's featured chart focuses on China's resilient demand for gold, even in the current environment of high prices.
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