Gold pullback is a good buying opportunity, Barclays tells investors that central banks are entering the market.

Investing.com - Since the outbreak of the US-Iran conflict, gold has given back all of its gains in 2026, but Barclays says this pullback has created an attractive entry point, and the structural support for gold remains solid.

Analyst Ajay Rajadhyaksha noted in a report: “Gold experienced a very strong three-year rally. But since the war began, it has given back all of its gains in 2026,” partly due to changing interest rate expectations and some central banks selling gold to defend their currencies.

He added: “We believe this presents a reasonable entry point.”

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Rajadhyaksha believes that central bank gold purchases increased significantly after 2022, and “are unlikely to fade,” noting that the fiscal situation in Western economies is worsening.

With energy-driven inflation surging alongside these dynamics, as well as the direct fiscal costs of the conflict itself, the analyst thinks multiple factors should support gold prices.

Geopolitical risks are another key pillar of support. Ongoing Middle East conflicts have triggered energy shocks and heightened macroeconomic uncertainty, Barclays believes these conditions reinforce gold’s role as a hedge.

Rajadhyaksha stated: “Geopolitical risks, ongoing central bank buying, inflation surges driven by oil price shocks, and the fiscal impact of the conflict should all support gold, especially as a tail hedge in most investment portfolios.”

The analyst also downplayed the possibility that aggressive policy tightening could pressure precious metals. He emphasized that the Federal Reserve has failed to achieve its 2% inflation target for several years and does not expect rate hikes in 2026, indicating that the macro environment may still favor non-yield assets.

As of press time, spot gold was trading at $3,433.39, down 1.6% intraday.

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