The research firm indicates that the Federal Reserve’s bias toward tightening interest rates creates significant opportunity-cost headwinds for bullion. While gold recently reclaimed support above $4,100 per ounce, analysts argue that a decisive breakout is unlikely until markets adjust their expectations for policy shifts, potentially not occurring until the latter part of the third quarter.

Seasonal factors further complicate the outlook, as July and August typically represent the weakest period for physical gold demand. Elevated prices continue to suppress jewelry consumption, and retail investment has cooled across major markets. Although there are tentative signs of recovery in China and India, these gains remain modest and start from a low base.

Despite the short-term stagnation, Metals Focus maintains that the long-term bull market for gold remains intact. The firm expects a price recovery to resume toward the end of the year, anticipating that policymakers will eventually prioritize avoiding a recession over strictly adhering to inflation targets. Structural drivers—including geopolitical instability, concerns regarding the long-term value of the U.S. dollar, and stretched equity valuations—ensure that gold retains its essential role as a portfolio diversifier.