A friend asked if it’s time to buy gold. Here’s what I told him

I was inspired to write this piece after a recent conversation with a friend. It started, as these things often do, with a casual chat. He mentioned he was thinking about buying gold. I pointed out the recent dip in prices. He paused, then asked, “Should I buy now?” It's a simple question, but one that's been echoing in my head ever since.

After a record run through 2025, gold has finally paused for breath. In the weeks since prices touched fresh highs above US$4,400 an ounce, the market has pulled back, prompting the inevitable question from investors: 

Is this a buying opportunity, or the start of something more serious?

To unpack that, I sat down with Justin Lin from Global X, who argues the recent correction is less a warning sign than a healthy reset. In his words:

“We believe that if the constructive environment persists, gold has the potential to reach US$6,000 in 2026.”

It’s a bold target, especially as major institutions are turning more cautious. Citi Research, in its latest Global Commodities: Gold Outlook (Nov 2025), notes that prices have already disconnected from traditional valuation metrics, with spending on gold now running at its highest share of global savings in half a century. 

Citi’s base case sees a “grind lower” through 2026 as US growth stabilises and rate cuts become less stimulatory for safe-haven demand, though it concedes structural tailwinds remain intact.

For Lin, the logic for holding gold is still compelling. The metal has proved a rare winner in an era of fiscal expansion, geopolitical tension, and the debasement of fiat currencies. And while Citi sees the risk of profit-taking by central banks, he believes sovereign demand and a bifurcating global financial system will keep the floor firm.

Whether you see the current pause as consolidation or complacency depends on your time horizon. For long-term investors, the question isn’t whether gold has peaked — but whether conviction should.

Why the dip happened

According to Lin, the sell-off was “a healthy and necessary cooldown.” He says gold had become overbought as retail enthusiasm ran ahead of fundamentals. 

“Even as prices approached US$4,500 in October, most market participants recognised that the rally had grown frothy,” he explains. “Gold, after all, is a safe-haven asset, it isn’t meant to go parabolic.”

He attributes the correction to short-term profit-taking and a pause after a series of step-wise surges that began in late 2024. 

“Over the past 24 months, gold has tended to move in clear stages,” he says. “It surged to US$2,750 on election uncertainty, plateaued, then climbed again to US$3,000 amid tariff fears. Most recently, the move through US$4,000 was fuelled by lower rates, Western ETF catch-up flows, and some speculative froth. A brief pause here seems appropriate — before momentum likely resumes toward new highs.”

The fundamental backdrop

Despite the correction, Lin maintains a constructive outlook: 

“The US$4,000 level, which gold has held firm over the past two weeks, presents an attractive entry point in our view. Ongoing central-bank demand should continue to provide a strong structural tailwind and help limit downside volatility.” 

He points to emerging-market accumulation, “South Korea recently signalled it would purchase gold for its reserves,” as evidence that appetite remains broad-based.

Citi Research agrees on the structural strength but warns the market’s current exuberance is historically stretched. Its analysts note that global spending on gold now accounts for 0.55% of GDP — the highest in 55 years — and nearly 2.2% of gross national savings. They estimate households are holding gold equivalent to 3.5% of global wealth, double the level of five years ago

A cycle driven by investors, not miners

Where earlier bull markets were supported by jewellery and industrial demand, this one is dominated by financial buyers. “Investment demand excluding central banks has been the primary driver of the rally,” Citi notes, adding that net investment flows are running at record levels above US$350 billion annualised.

ETF inflows from the US and China have provided the bulk of this support, while mine supply has yet to respond meaningfully. Citi Research notes that the physical gold market is extremely small relative to global wealth; even a modest reallocation of household assets toward gold would far outstrip annual mine production and take many years of output to satisfy.

What could reignite or derail gold’s momentum

For Lin, the next leg higher hinges on rates and risk perception. 

“Renewed dovishness from the Federal Reserve could definitely power gold’s next move,” he says. 

“Geopolitical tensions have been cooling tentatively over the past few months, but I think its general consensus that there continues to be underlying risks of escalation, so from that perspective, we also believe gold is the optimal hedge against tail risks.

Citi’s economists, however, suggest a “goldilocks” scenario could work against the metal. If US growth strengthens in 2026 and inflation drifts lower, capital may rotate back into equities and industrial metals. Their base case, a gradual easing of tariffs, stabilising growth, and rates around 3%, favours copper and oil over gold.

Outlook: conviction versus caution

Lin’s conviction remains high. 

“Gold’s role as an effective hedge against macroeconomic tail risks means it can serve a dual purpose — offering both growth potential and defensive resilience,” he says. 

His 12-month target sits at US$6,000, underpinned by sovereign demand, a bifurcating global financial system, and continued debasement concerns.

Citi takes the opposite tack, forecasting an average of US$3,650 in 2026, with a bull-case of US$5,000 and a bear-case near US$3,000. It sees a “high call on stockholders.” In other words, gold owners being reluctant to sell even as prices rise, as a risk that could unwind if growth or confidence returns

The divergence of views underscores why this latest pullback matters. For bullish investors, it’s a breather before the next surge. For cautious ones, it’s a warning that gravity still exists, even for gold.

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Global X Physical Gold (GOLD)

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Global X Gold Bullion ETF (GXLD)

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Global X Gold Bullion (Currency Hedged) ETF (GHLD)

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