Gold’s recent bull run has attracted tremendous attention. After bottoming on 3 November 2022, the gold price has more than doubled from US$1,429/oz to US$3,287/oz, equivalent to a 30% compound annual growth rate.1 This has been supported by consistent central bank purchases as well as soaring geopolitical and, more recently, trade risks; all this has dwarfed the negative impact from rising real rates amid rate hikes by central banks and cooling inflation between November 2022 and August 2024.2
As the gold price has continued to break new highs, investors have become wary of potential risks. And we have studied previous bear runs for gold and analysed the factors that could lead to mid- or longer-term pullbacks, based on historical patterns (Table 1).
In summary, the gold price may experience mid-term weakness if geopolitical and trade risks globally ease, or higher opportunity costs if the US dollar and Treasury yields rise (Table 2). Slowing central bank gold purchase and retail investment demand could also lead to mid-term gold price adjustment.
While we don’t consider these likely, longer-term pullbacks could come from more persistent and structural demand shifts which may lead to notable declines in gold’s investment demand from both institutions and retail investors as well as rapid rises in supply (Table 3).
| Previous bull run | Pullback duration | Drivers | |
| Aug 1971 ~ Nov 1974 +353% |
Nov 1974 ~ Aug 1976 -43% |
Rising opportunity costs (FX & interest rate) |
Cooling geopolitical risks |
| Aug 1976 ~ Sep 1980 +541% |
Aug 1980 ~ Jun 1982 -52% |
Rising opportunity costs (FX & interest rate) |
Cooling geopolitical and inflation risks |
| Jun 1982 ~ Jan 1983 +57% |
Jan 1983 ~ Feb 1985 -57% |
Rising opportunity costs (FX & interest rate) |
Cooling geopolitical and economic risks |
| Feb 1985 ~ Nov 1987 +71% |
Nov 1987 ~ Aug 1999 -48 |
Central bank selling & rising gold supply | |
| Aug 1999 ~ Aug 2011 +612% |
Aug 2011 ~ Dec 2015 -42% |
Rising opportunity costs (FX & interest rate) |
Falling risks and weakening momentum |
*Based on monthly LBMA Gold Price PM in USD.
Source: ICE Benchmark Administration, World Gold Council
Demand and supply ultimately determine gold prices. Our analysis shows that investment, through gold ETFs, futures or over-the-counter spot transactions, dominates gold price changes in the short-to-medium term. And these sources of net demand are driven by factors such as the performances of competing assets, changes in risk appetite, geopolitics and inflation concerns.
In the longer term, consumers, buy-and-hold investors – from individuals to large institutions – and technology demand become as important in setting prices. The predominant driver is economic growth.
To sum up, we typically categorise gold’s key drivers into four groups:
And based on this, we aim to summarise similarities in gold’s bear runs and make assumptions of the future.
Gold, like all assets, has its ups and downs. History shows clear bull and bear runs.3 Since the collapse of the Bretton Woods system in 1971, when gold's fixed exchange rate with the dollar ceased, gold has undergone five major pullbacks (Table 1).
After examining each of these bear runs, we found some common ground. For instance, almost all major gold pullbacks were in main, or in part, related to rising opportunity costs related to real rates and the dollar (Chart 1) – sometimes driven by a booming economy, and sometimes by rapid US Fed rate hikes. This is an obvious outcome, as rising opportunity costs and strong economic performance often suppress investor interest in holding gold and lift risk appetite.
Cooling risk and uncertainty was another theme that featured throughout gold’s major pullbacks (Chart 2). During most of the five gold price pullbacks we observed easing geopolitical tensions, strong economic performance and cooling inflation in major markets. And these usually come with equity bull runs, diverting investor attention away from safe-haven assets such as gold.
In some cases, changes in supply and demand conditions weighed heavily on gold. Decelerating momentum from sustained central bank gold sales and gold ETF outflows contributed to gold’s past bear runs.
We created hypothetical scenarios that could dampen gold’s current momentum (Table 2). Based on historical guidance we have made three assumptions that could reduce safe-haven demand for gold, push up opportunity costs of holding gold, or slow physical gold demand – all of which would likely lead to mid-term gold price weakness.
It is worth noting, however, that previous bear runs have been accompanied by a combination of these factors and not only one.
Interestingly, there has only been one bear market since 2000. We believe that this is thanks to three structural changes that gold market has experienced:
| Scenarious | A peaceful world | America is great again | Running out of steam |
| Assumptions | Global trade risks fade | US economy thrives and the Fed keeps rates high while inflation stabilises | Following a 40% increase over the past 12 months, speculative investor positioning turns bearish |
| The Russia-Ukraine war eases or the Middle East conflicts recedes | AI breakthrough boosts productivity notably, supporting growth | Higher gold prices and weak economic growth prevent consumers from stepping up | |
| Gold driver impacted | Risk and uncertainty | Opportunity cost | Momentum |
| Possible outcome | Safe-haven demand fades | Real rates rise, the dollar strengthens, investor risk appetite improves | Gold demand weakens |
Source: World Gold Council
Conversely, a more protracted pull back in the gold price would need to come from a structural shift that either undermines demand or significantly boosts supply. In this context, we lay out four themes that, while unlikely, could drive gold towards a longer-term bear run (Table 3). These include:
A drying up of central bank demand
| Scenarious | Central banks step away | Cryptocurrency fever | Shift in tastes | Striking gold |
| Assumptions | A fiscal/economic crisis in major buyers/holders economies force sales | Crypto assets gain recognition by major countries, raising their status | China and India fully open capital markets, weakening gold’s role as a global asset to local investors | Major gold mining deposits beyond any current expectations are discovered and economically viable to extract |
| A decline in global trade or the value foreign currency reserves takes gold allocation close to potential target | A unified global regulatory framework emerges, leading to the adoption of crypto assets by major institutions | Young consumers in major markets shift away from gold | ||
| The US dollar dominates again global reserves through American exceptionalism or trade pressure | The US pioneers crypto reserves, prompting other central banks to follow | |||
| Possible outcome | Central banks gold demand slows down significantly (or turns negative) | Notable weakness in gold demand from investors and/or central banks | A steady but consistent reduction in demand from investors or consumers | A marked uptick in gold mine supply |
| Likelihood /Mitigation |
Gold reserves from emerging market central banks are still well below those of developed markets and a resurgence of the USD does not appear likely in the current market environment | Gold and cryptocurrencies are fundamentally different with market research consistently highlighting that investors look differently at their portfolio roles | Gold has maintained its status as a valuable strategic asset and consumer good in key markets | Mine production is cost and labour intensive, with new discoveries taking decades to come online allowing the market to adjust over time |
Source: World Gold Council
With gold’s rise has slowed down in recent months following an impressive rally, many investors have become concerned about a potential inflection point. To assess such a possibility, we look back to history for sources of stress that may lie ahead.
In the short-to-medium term, cooling risks rising rates, and reviving US economic growth may slow gold demand.
A structural shift from either demand or supply would be needed to place longer-term pressure on gold. However, we believe that these shifts are either unlikely or would have mitigating factors given the current global geopolitical landscape and economic backdrop.
1Based on the LBMA Gold Price PM in USD between 3 November and 30 June 2025.
2For more, see: Gold Demand & Supply by Country | World Gold Council and Gold Return Attribution Model | World Gold Council.
3Base on various sources of definitions, we similarly define a period where gold’s price falls more than 20% as a bear run. For more: Bear Market Guide: Definition, Phases, Examples & How to Invest During One
