BCA Research has advised clients that the recent downward move in gold appears to be losing momentum and that near-term headwinds are easing, strengthening the case for taking long positions in the metal.
The advisory noted that gold has fallen 26% from its Jan. 29 all-time high, after having been among the best-performing assets in 2025. The firm observed that the metal "failed to provide protection during the inflationary shock from the Iran war," a development that saw it fall out of favor with many analysts.
Despite that sudden loss of support, BCA's assessment is that "the selloff is getting long in the tooth," and that the most severe phase of the downturn is likely behind the market. The research house places central importance on real interest rates as the determinant of gold's direction, arguing that the metal's reputation as an inflation hedge is "overstated."
On that basis, BCA said the worst of the headwind from real rates is likely past, and it expects the U.S. dollar to move "from being a headwind to a tailwind to the yellow metal."
To frame its analysis, the firm outlined three stages of the gold bull market. The first phase was a surge in central bank demand beginning in late 2022. The second phase was an ETF-driven acceleration in 2025. The current phase, according to the firm, is characterized by the reassertion of real rates and the dollar "as the dominant drivers."
BCA also highlighted that ongoing, elevated central bank purchases are now acting to provide a floor under prices rather than serving as a principal engine for further gains. The firm additionally noted that geopolitics and reserve diversification should continue to offer structural support for gold, both directly through central bank acquisitions and indirectly via a weakening dollar.
Contextual takeaway: BCA's client note argues that with real-rate pressures moderating and dollar dynamics potentially shifting, tactical conditions for gold have improved and a long stance may be warranted. The firm emphasizes that central bank demand now underpins prices rather than fueling a fresh leg higher.