BCA Research told clients that gold's selloff is running out of steam and that its near-term headwinds are fading, making the case for going long on the metal. The firm argues real interest rates, not inflation, drive gold's price, and expects the dollar to turn from a drag into a tailwind.
BCA Research told clients that gold's recent selloff is running out of steam and that its tactical headwinds are easing, making the case for going long on the metal.
Gold has slumped 26% since its Jan. 29 all-time high, after ranking among the top performers in 2025.
The metal failed to shield investors from the inflation shock triggered by the Iran war, BCA said, and quickly fell out of favor with analysts. Still, according to BCA: "the selloff is getting long in the tooth," with the worst of the downturn likely behind it.
Central to BCA's call is the argument that real interest rates, rather than inflation, drive gold, and it describes the metal's reputation as an inflation hedge as overstated.
The firm said the worst of the drag from real rates is likely past, while the dollar should shift from being a headwind to a tailwind for gold. BCA traced the bull market through three phases: a surge in central bank demand starting in late 2022, an ETF-driven pickup in 2025, and the current phase, in which real rates and the dollar have again become the dominant drivers.
It added that elevated central bank buying now provides a floor for prices rather than driving further gains. BCA believes geopolitics and reserve diversification should continue to support gold structurally, both directly through central bank purchases and indirectly through a weaker dollar.
Source: Investing.com
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