Gold correction has reset the market, but MKS’ Shiels still sees $4,500 average price in 2026

In her mid-year outlook, Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, said she is maintaining her 2026 average gold price forecast of $4,500 an ounce, arguing that the market is transitioning from an unsustainable parabolic rally into a healthier, longer-lasting bull market.

At the same time, the global refiner expects gold to spend time consolidating between $3,800 and $5,000 an ounce and is leaving its 2026 bull-case target of $5,800 an ounce intact, noting that renewed geopolitical turmoil could still drive prices to fresh all-time highs.

"The secular trade has not unwound," Shiels wrote. Instead, she expects a "milder, more sustainable and two-way bull trend" to emerge in the second half of the year as the U.S. economy slows and investors once again focus on structural macro risks.

Rather than chasing momentum, MKS PAMP argues that gold's next advance will be built on more durable foundations.

Shiels said the biggest long-term drivers are rising fiscal deficits, persistent inflation pressures, continued currency debasement, central bank diversification away from U.S. dollar assets, and an increasingly fragmented geopolitical landscape.

"The persistent 'expect the unexpected' geo-macro regime" remains the dominant theme supporting gold, she said in the report.

Shiels' mid-year outlook comes as gold continues to struggle through a broad bear-market correction.

However, she added that much of gold's recent weakness reflects a sharp reversal in investor positioning rather than a deterioration in the metal's long-term fundamentals.

She also said that sentiment has now swung too far in the opposite direction.

In her report, she estimates gold's fair value at around $4,000 an ounce, describing the metal as "nearer the bottom than the top" after speculative positioning has largely washed out. Retail investors have exited, commodity trading advisors have built significant short positions, and ETF investors have reduced exposure, creating the conditions for a more constructive recovery.

While maintaining her bullish longer-term outlook, Shiels also acknowledged that monetary policy remains the biggest short-term headwind.

She said that hawkish rhetoric from the Federal Reserve under new Chair Kevin Warsh could keep real interest rates elevated and the U.S. dollar supported for longer than expected, limiting gold's upside in the near term.

However, despite Warsh's hawkish rhetoric, Shiels said the Fed's ability to tighten policy remains constrained by America's growing debt burden.

She explained that mounting interest costs, fiscal dominance, and political pressure make another sustained hiking cycle unlikely. MKS PAMP expects real yields to remain capped over time, providing renewed support for precious metals once current macroeconomic headwinds begin to fade.

"The correction has reset positioning," Shiels said, "but it has not changed the structural case for gold."