Gold — The Fall Began Before the War: What Actually Moved Gold, and Where It Goes Next

Report summary

Gold reached its 2026 peak on 29 January and its trough on 25 June. On the LBMA Gold Price PM benchmark, the basis used throughout this report for period analysis, it fell from $5,405.00 to $4,001.80, a drawdown of 26.0%. It has since recovered 14.0% from that low to $4,562.75 on 28 August, a gain of 13.3% measured from the end-July close of $4,027, leaving it 15.6% below the January fix. The conventional explanation for the fall is the Middle East conflict that began on 28 February. The sequence does not support it. One session accounts for more of the drawdown than any other observed in the period, and it came a month before the first shot. Gold fixed at its high on Thursday 29 January and fell 7.8% to $4,982 at the following day's fixing, the last of the month because 31 January fell on a Saturday. That one session accounts for 27.1% of the whole decline measured in logarithmic returns, and it happened four weeks before hostilities began. Gold then rallied through February. Because 28 February 2026 was also a Saturday, no February fixing post-dates the outbreak: the month's close of $5,222, a gain of 4.8%, is the last observation before the first shot, and at that level gold stood just 3.4% below its all-time high. The war did not begin with gold already collapsing.