International gold prices fell below $4000 per ounce again on July 16, 2026, down nearly 30% from the historical high at the end of January this year. The Federal Reserve has not initiated a new round of interest rate hikes, and gold has plummeted significantly from its peak, sparking debate in the market on whether this bull market cycle has come to an end.
According to reports from “China News and Finance,” on the evening of July 16, spot gold continued to decline, dropping below $4000 per ounce, a decrease of nearly 1.5%.
The escalation of conflicts in the Middle East has driven up international oil prices, causing market concerns that rising energy prices will re-ignite inflation and increase the likelihood of Federal Reserve interest rate hikes, thus putting pressure on the price of gold.
In another report by “Daily Economic News,” London spot gold had risen by 64.56% in 2025, reaching a historical high of $5598.75 per ounce on January 29 of this year. Since then, the market trend has reversed, with prices dropping to $3942.43 on June 30 and falling below $4000 per ounce again on July 14.
Data from the World Gold Council shows that at the beginning of this year, the price of gold hit historical highs 12 times. Following the outbreak of the US-Iran conflict, gold price volatility briefly exceeded 50%, although it later dropped to below 30%, still higher than the average level of around 17% in the past 20 years.
The report by the “Daily Economic News” mentioned that after the peak prices in 1980 and 2011, there were two deep adjustments in gold prices, both accompanied by the tightening of Federal Reserve monetary policy or expectations of such tightening.
In 1980, the Federal Reserve once raised the federal funds rate to 20%, leading to a long period of low gold prices with a cumulative decline of about 70%; after the peak in gold prices in 2011, prices fell by about 45% by 2015.
The current trend is different. The Federal Reserve has not actually raised interest rates, yet gold prices have dropped by almost 30% from the highs earlier this year.
In June, the US Consumer Price Index rose by 3.5% year-on-year, lower than market expectations and the 4.2% increase in May. The core Consumer Price Index also dropped from 2.9% in May to 2.6%.
However, after the rise in oil prices due to the Middle East situation, concerns about a resurgence in inflation have resurfaced. According to Reuters, as of the morning of July 16 Eastern Time, the market predicts a probability of over 50% for a Federal Reserve rate hike in September.
Following the rapid decline in gold prices, there is a divergence in the market regarding whether gold has already peaked.
Analyst Lin Rongxiong from Guotou Securities believes that there may be signals of a top in gold prices, as the weakening US dollar environment that supported the rise in gold prices is undergoing change.
Analyst Ye Qin Ning from Guangfa Futures, on the other hand, suggested that this decline is related to profit-taking by bull speculators after years of consecutive price increases in gold, as well as fund diversion due to the artificial intelligence boom. However, continuous gold purchases by central banks worldwide, coupled with concerns about the US dollar’s reserve status, continue to provide support for gold.
JPMorgan Chase has lowered its average gold price forecast for the third quarter of this year to $4300 per ounce and further reduced it to $4500 per ounce in the fourth quarter; HSBC Bank has also revised its 2026 average gold price forecast from $4864 per ounce to $4560 per ounce.
The World Gold Council’s scenario analysis indicates that if the macroeconomic environment remains relatively stable, gold prices in the second half of the year may fluctuate around $4100 per ounce, up or down by about 5%; if the economy deteriorates, expectations of interest rate hikes cool down, or geopolitical risks increase, gold prices could rise again to around $4500 per ounce or higher.
Gold prices on the mainland of China have also fallen in sync. According to data from the Shanghai Gold Exchange, on July 15, 99.99% purity gold (spot contracts of gold bullion with purity not less than 99.99%) closed at 877.99 yuan per gram, down approximately 30% from the high of 1256 yuan per gram earlier this year.
On July 16, the Shanghai Gold Benchmark Price at noon was reported at 878.07 yuan per gram, indicating that gold prices in China continue to hover near their lows for the year.