MKS PAMP maintains its 2026 average gold price forecast of $4,500 per ounce despite the precious metal's sharp correction from record highs, according to the firm's mid-year outlook. Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, argues the recent selloff represents a reset in investor positioning rather than the end of gold's secular bull market. The global refiner characterizes the correction as a transition from an unsustainable parabolic rally into a healthier, longer-lasting bull trend, with gold expected to consolidate between $3,800 and $5,000 per ounce while the firm's bull-case target of $5,800 remains intact.
MKS PAMP Sets $3,800-$5,000 Consolidation Range for Gold
MKS PAMP expects gold to consolidate between $3,800 and $5,000 per ounce and is leaving its 2026 bull-case target of $5,800 per ounce intact. Shiels noted that renewed geopolitical turmoil could still drive prices to fresh all-time highs. "The secular trade has not unwound," Shiels wrote, expecting 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 focus on structural macro risks.
Shiels Estimates Gold Fair Value at $4,000 Per Ounce
Shiels estimates gold's fair value at around $4,000 per ounce, describing the metal as "nearer the bottom than the top" after speculative positioning has largely washed out. The report indicates that retail investors have exited, commodity trading advisors have built significant short positions, and ETF investors have reduced exposure, creating conditions for a more constructive recovery. Shiels stated 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, adding that sentiment has now swung too far in the opposite direction.
MKS PAMP Identifies Fiscal Deficits and Geopolitical Fragmentation as Long-Term Drivers
Shiels identified the biggest long-term drivers as 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. MKS PAMP argues that gold's next advance will be built on more durable foundations rather than momentum chasing.
Fed Chair Warsh's Hawkish Stance Creates Near-Term Headwind
Shiels acknowledged that monetary policy remains the biggest short-term headwind, stating that hawkish rhetoric from Federal Reserve 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, she 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."
FAQ
What is MKS PAMP's 2026 average gold price forecast?
MKS PAMP maintains its 2026 average gold price forecast of $4,500 per ounce, with a bull-case target of $5,800 per ounce remaining intact despite the recent market correction.
Why does Nicky Shiels believe gold's correction does not signal the end of the bull market?
Nicky Shiels argues the recent selloff represents a reset in investor positioning rather than a deterioration in gold's long-term fundamentals, with the correction transitioning the market from an unsustainable parabolic rally into a healthier, longer-lasting bull trend supported by structural drivers including fiscal deficits, inflation pressures, and geopolitical fragmentation.
