Key Takeaways:
Gold's slide below $4,100 an ounce is a pause in a secular bull market, not the start of a new bear phase, according to Ninepoint portfolio manager Wachowiak.
"The long-term fundamentals remain intact, and the recent weakness has created an attractive buying opportunity across both bullion and mining equities," Wachowiak said.
Gold traded near $4,080 at press time, a mid-single-digit decline on the year after peaking above $4,500 in late January. The correction follows a 65% surge in 2025 driven by a record 801 metric tons of ETF inflows, according to the World Gold Council. Spot gold fell 0.7% on Tuesday, with futures declining 1%, as higher real interest rates and a stronger dollar weighed on the non-yielding asset.
The selloff has pushed gold mining equities into undervalued territory, Wachowiak said, even as structural demand drivers remain intact. OCBC recently cut its end-2026 gold forecast to $4,360 from $5,100, citing near-term headwinds, though it maintained a positive long-term outlook.
Central bank purchases totaled 863 metric tons in 2025, down from 1,092 in 2024 but still well above the 10-year average, as China and other nations diversify reserves away from U.S. dollar assets. JPMorgan Chase has noted that China appears to be ramping up gold purchases, a trend that gold bulls expect to continue as U.S. debt levels rise and trade tensions persist.
The correction has also weighed on silver, which fell 1.4% on Tuesday. OCBC lowered its end-2026 silver forecast to $67 an ounce from $89.50, though the bank cited structural supply deficits and industrial demand from solar energy and electrification as long-term supports.
For investors seeking direct exposure, the iShares Gold Trust (IAU), with $61.5 billion in assets and a 0.25% expense ratio, tracks physical gold bullion, while the Aberdeen Physical Silver Shares ETF (SIVR) provides silver exposure at a 0.3% fee. IAU has returned 22.4% over the past year, while SIVR has gained 65.9%, reflecting silver's higher volatility.
Wachowiak's call adds to a growing view among fund managers that the pullback is a buying opportunity. The key question for the second half of 2026 is whether ETF demand recovers and jewelry buyers re-enter the market at lower prices, which could provide a floor for gold and lift mining equities from current levels.
This article is for informational purposes only and does not constitute investment advice.
