Gold recorded its steepest quarterly decline in 13 years during the three months ended June, as a strengthening U.S. dollar and growing expectations of a Federal Reserve rate increase pushed the precious metal sharply off its January highs. The yellow metal fell more than 26% from its record of $5,586.20 an ounce, set in January, to trade near $4,025 by the end of the second quarter, according to a note from UBS's chief investment office.
June alone saw bullion drop 11%, the largest monthly slide since October 2008. The selloff has forced financial advisors to reconsider the role of gold in client portfolios heading into the second half of 2026, as the metal's traditional safe-haven appeal is tested by macroeconomic headwinds.
A softer-than-expected ADP National Employment Report provided a brief reprieve on Wednesday. Private-sector hiring rose by just 98,000 jobs in June, below the 110,000 economists had forecast and down from a downwardly revised 122,000 in May. Dr. Nela Richardson, ADP's chief economist, noted that labor supply constraints are showing up even as overall hiring cools. The data helped spot gold climb as much as 1.6% to $4,071.04 an ounce, reversing part of the prior session's slide to a fresh multi-month low.
Earlier that day, Federal Reserve Chair Kevin Warsh, speaking at the European Central Bank's forum in Sintra, Portugal, said inflation risks have eased in recent weeks, though he declined to signal the central bank's next move on rates. Warsh noted that energy prices have fallen substantially since the U.S. and Iran signed a memorandum of understanding to end their conflict last month, though they remain slightly above pre-conflict levels.
Despite the quarter's rout, some strategists remain bullish. UBS's chief investment office argues the pullback is an opportunity for underallocated investors, forecasting gold will climb to roughly $5,200 an ounce over the next 12 months as dollar strength fades and the Fed holds rates steady. The bank points to steady central bank buying as a stabilizing force, citing preliminary May data showing Poland added 18 metric tons of gold to reserves and China added another 10 metric tons.
Goldman Sachs issued a 2026 price target of $4,900 an ounce, down from $5,400, but co-head of global commodities research Samantha Dart wrote that headwinds from a potentially more hawkish Fed under Warsh should at least partly reverse over time. The Goldman researchers cited a World Gold Council survey in which a record 45% of 76 central banks polled between February and May expect to increase their gold reserves over the next 12 months.
Structurally, Dart said, emerging-market central bank diversification following the 2022 freezing of Russia's reserves remains the anchor of Goldman's $4,900 forecast, noting gold's 123% gain since 2022. Over the medium term, risks to the price forecast remain skewed to the upside, she added.
For advisors, the divergence between near-term rate pressure and long-term structural demand creates a complex allocation decision. As Carson Group Acquires $270M Colorado Practice and other firms expand, the question of how much gold to hold in client portfolios remains unresolved. Meanwhile, DOL's 401(k) Alternative Investment Rule Sparks Litigation Fears adds another layer of complexity for retirement-plan specialists weighing alternative assets like gold.
