Gold has erased its gains for 2026 since the onset of the U.S.-Iran conflict, but Barclays says the recent setback presents an attractive buying opportunity and that underlying supports for the metal remain intact.
Analyst Ajay Rajadhyaksha noted that "Gold has had a very strong 3y run. But it has given back all of its 2026 gains since the war started," attributing the reversal in part to changing expectations for interest rates and to "some central bank selling to defend currencies." He added: "This makes for, we think, a reasonable entry point."
Rajadhyaksha pointed to continued central bank demand as a key structural anchor for prices. He said that gold buying by central banks, which accelerated sharply after 2022, "is unlikely to fade," citing deteriorating fiscal positions across Western economies as a motivating factor for continued accumulation.
On top of that structural trend, Barclays highlights an energy-driven spike in inflation and the direct fiscal costs tied to the conflict as additional supportive elements for gold. The analyst emphasized that geopolitical uncertainty stemming from the Middle East conflict has produced an energy shock and heightened macroeconomic risk, reinforcing gold's role as a hedge.
"The combination of geopolitical risk, persistent central bank buying, the inflation spike from the oil shock, and the fiscal effect of the conflict should all support gold, especially as a tail hedge in most portfolios," Rajadhyaksha said.
Barclays also assessed the interest-rate outlook as unlikely to become a significant headwind. The analyst pointed out that the Federal Reserve has missed its 2% inflation target for several years and that Barclays does not expect a rate hike in 2026, a stance that suggests a macro environment that could remain favorable for non-yielding assets such as gold.
At the time of reporting, spot gold was trading at $4,433.39, down 1.6% on the day.
The bank's analysis frames the recent price weakness as a tactical entry opportunity while leaving intact a multi-factor case for support: central bank accumulation, energy-driven inflation pressures, fiscal costs linked to the conflict, and elevated geopolitical risk. Each of these elements is presented as reinforcing gold's portfolio role as a hedge against uncertainty.