Capital Economics: Gold price still has room to fall, may drop to $3,500 by year-end

1. Although the market generally expects gold prices to rebound after falling below $4,000 per ounce, Capital Economics economist Hamad Hussain believes that this precious metal still has further downside potential over the next 18 months. 2. He points out that expectations of Federal Reserve interest rate hikes will push up real yields, thereby putting continued pressure on yieldless gold. In addition, a potential sharp stock market crash could further exacerbate the decline in gold prices—during sudden sell-offs in the stock market, investors are often forced to liquidate quality assets to meet margin calls, and gold is not immune. 3. Capital Economics expects gold prices to fall to $3,500 per ounce by the end of 2026, and to drop further to $3,250 by the end of 2027.