When will the Gold Price Drop Drastically? This is the Full Explanation

Jakarta, Pintu News – The price of gold has risen spectacularly in recent years, even breaking the $4,000 per ounce mark in 2025. This rise was triggered by factors such as geopolitical uncertainty, a weakening US dollar, expectations of interest rate cuts by the Fed, and massive buying by central banks. However, the question that now arises is: can gold prices fall dramatically? And when would that happen?

What Can Cause Gold Prices to Fall?

Although the long-term trend shows a bullish tendency, a correction in gold prices is still possible. Here are some scenarios that could potentially lead to a decline in gold prices:

1. US Dollar Strengthening
   Since gold is priced in dollars, a strengthening USD exchange rate could make gold more expensive for global investors, lowering demand and prices.
2. Sudden Fed Rate Hike
   If the Federal Reserve cancels its interest rate cut plan or even raises it, gold’s appeal as a non-yielding asset will decline.
3. Easing Geopolitical and Economic Tensions
   If global tensions ease, including trade conflicts and wars, then investor interest in gold as a safe haven could also decline, impacting prices.
4. Technical Pressure on the Market
   Some technical indicators such as RSI being in the overbought zone could trigger profit-taking, thus triggering a short-term correction.
5. State Bans or Restrictions on Gold Purchases
   New tariff measures such as the 39% US tariff on Swiss gold bullion could also change demand dynamics and create price pressure in the short term.

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Will the Downturn Happen in the Near Future?

Based on analysis from institutions such as JPMorgan, Goldman Sachs, and Bank of America, the medium- and long-term outlook for gold prices is still bullish until 2026. However, technical signals point to a potential minor correction in the coming weeks, especially if prices are unable to hold above the $3,859-$4,000 support.

So, a drastic drop is unlikely unless there is a sudden major change such as extreme monetary policy tightening, global geopolitical peace, or a sudden liquidity crisis.

Conclusion

Gold prices have the potential for a correction, but a drastic decline is highly dependent on global macroeconomic and geopolitical conditions. For now, analysts still see gold as a strong and defensive asset, especially amid uncertainty. Investors need to closely monitor technical signals and US interest rate policy to anticipate the next price move.

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FAQ: Gold Price Drops

1. Can the price of gold drop dramatically in the near future?
Generally speaking, no. Analysts such as those from Goldman Sachs, JPMorgan, and Bank of America still predict a bullish trend until 2026. However, a technical correction in the short term remains possible, especially if gold fails to maintain support in the $3,859-$4,000 per ounce area.

2. What are the main factors that could put pressure on gold prices?
Some of the main factors include: a strengthening US dollar, a sudden interest rate hike by the Fed, easing geopolitical tensions, as well as profit-taking when technical indicators such as RSI show overbought conditions.

3. How do interest rates affect the price of gold?
Since gold does not earn interest (non-yielding), rising interest rates make other assets such as bonds more attractive, which can reduce interest in gold and depress its price.

4. Can tariffs or regulations affect the price of gold?
Yes. For example, the 39% US import tariff on Swiss gold is creating price pressure due to increased purchasing costs, as well as potential purchase restriction policies by central banks.

5. Is gold still worth investing in today?
Still, especially as a portfolio diversification and hedge against inflation and global uncertainty. However, investors need to pay attention to short-term risks and follow macroeconomic developments regularly.

Reference:

• Cristian Cochintu. Gold Forecast & Price Prediction: $5,000 in 2026? Accessed November 25, 2025