Gold investors just got a harsh reminder that even the strongest rallies can experience painful pullbacks.

After surging to record highs earlier this year, gold prices suffered their steepest weekly decline since March, leaving many investors wondering whether the precious metal’s historic run is finally running out of steam.

But while some traders are rushing for the exits, one veteran market strategist believes the selloff may simply be setting the stage for the next major move higher.

In fact, he still sees a path to $5,500 gold by year-end and believes prices could eventually reach $10,000 before the decade is over.

Gold Investors Just Got a Wake-Up Call

Gold futures fell another 1% Monday to approximately $4,321 per ounce after plunging 3% Friday.

The weekly decline totaled nearly 5%, marking the largest weekly loss since March.

The move caught many investors off guard because gold had been one of the market’s strongest-performing assets during the past two years.

Adding to the concern, gold broke below its widely watched 200-day moving average near $4,443 per ounce, a technical level that many traders use to gauge long-term market direction.

When major support levels break, selling pressure often accelerates as technical traders exit positions.

The breakdown has prompted some analysts to warn that further downside could be ahead.

One Economic Report Changed Everything

The catalyst for the selloff was Friday’s stronger-than-expected U.S. jobs report.

The labor market added significantly more jobs than economists anticipated, reinforcing the view that the U.S. economy remains resilient despite elevated interest rates.

For gold, that creates a problem.

Unlike stocks, bonds, or dividend-paying investments, gold generates no income. Investors typically become more attracted to gold when interest rates are falling because the opportunity cost of holding a non-yielding asset declines.

The stronger jobs data caused traders to scale back expectations for Federal Reserve rate cuts.

As a result, Treasury yields jumped sharply.

The yield on the 2-year Treasury note climbed above 4.17%, reaching its highest level in more than a year.

Higher bond yields tend to compete directly with gold for investor capital.

At the same time, the U.S. dollar strengthened, creating another headwind for precious metals.

A stronger dollar generally makes gold more expensive for international buyers, often reducing demand.

The Hidden Reason Gold Is Suddenly Falling

According to Ole Hansen, Head of Commodity Strategy at Saxo Bank, gold’s recent positioning made it especially vulnerable to a sharp correction.

Investors had become increasingly bullish in recent weeks.

Short sellers had largely exited the market while new buyers continued to add long positions.

That combination can create a crowded trade.

When prices begin falling, a rush to lock in profits can accelerate the downside move.

Hansen noted that once key support levels gave way, gold became vulnerable to a technical correction that may not yet be complete.

For short-term traders, the breakdown below the 200-day moving average is particularly significant because it signals weakening momentum.

The Level That Has Wall Street Concerned

The biggest technical development from the recent selloff may be gold’s break below its 200-day moving average.

Many institutional investors view this level as a key indicator of a market’s long-term trend.

When an asset falls below this support level, selling pressure often intensifies as technical traders and algorithmic funds reduce exposure.

That is exactly what may be unfolding now.

The next question investors are asking is where the next major support level sits.

Why Some Analysts Think $4,000 Is Next

Despite maintaining a bullish long-term outlook, Ed Yardeni, founder of Yardeni Research, believes the next major support level sits near $4,000 per ounce.

That means gold could still have meaningful downside from current levels before finding a more durable floor.

Historically, major bull markets often experience corrections of 10% to 20% before resuming higher.

Gold’s recent decline may simply represent one of those pauses rather than the end of the broader trend.

Yardeni argues that geopolitical concerns remain one of the biggest drivers for gold.

His view is that once tensions surrounding the conflict with Iran begin to ease, investors could regain confidence in the precious metal’s longer-term outlook.

The Surprising Case for $10,000 Gold

While the recent pullback has shaken investor confidence, Yardeni remains one of Wall Street’s most bullish voices on gold.

His forecast calls for gold to reach $5,500 by the end of 2026 and potentially $10,000 before the end of the decade.

That projection is based on several long-term themes:

Persistent government deficits
Ongoing central bank gold purchases
Geopolitical instability
Concerns about sovereign debt levels
Potential future monetary easing

Central banks around the world have been aggressively adding gold reserves over the past several years.

Countries including China, India, and several emerging market nations have increased purchases as they seek to diversify away from dollar-denominated assets.

That demand has become a powerful support mechanism for the market.

Silver’s Collapse Could Be Sending a Warning

Gold wasn’t the only precious metal hit by the selloff.

Silver suffered even steeper losses.

Silver futures dropped 2.4% Monday after collapsing 6.5% Friday, marking the metal’s largest one-day percentage decline since May.

Silver typically experiences greater volatility than gold because it serves both as a precious metal and an industrial commodity.

When investors become concerned about economic growth, silver often declines more aggressively.

The sharp selloff suggests traders are reassessing both inflation expectations and the outlook for interest rates.

What Happens Next Could Determine Gold’s Future

The next few weeks could be critical for determining whether gold stabilizes or continues lower.

Several factors will likely drive the next major move:

Federal Reserve Policy

Any indication that the Fed may still cut rates later this year could provide support for gold prices.

Treasury Yields

If bond yields continue rising, pressure on gold could intensify.

U.S. Dollar Strength

A stronger dollar remains one of the biggest obstacles for precious metals.

Geopolitical Risks

Escalating global tensions could quickly restore safe-haven demand.

Should Investors Buy the Dip?

For long-term investors, the current correction presents a difficult question.

On one hand, higher yields and a stronger dollar could continue weighing on gold prices in the near term.

On the other hand, many of the structural drivers behind gold’s bull market remain firmly in place.

Government debt levels continue climbing. Central banks remain buyers. Geopolitical uncertainty remains elevated across multiple regions.

Investors who believe those trends will continue may view a pullback toward $4,000 as a potential opportunity rather than a warning sign.

What Gold Investors Need to Know Now

Gold’s worst weekly decline since March has undoubtedly rattled investors.

The combination of stronger economic data, rising Treasury yields, and a strengthening dollar has created meaningful pressure on precious metals.

Yet some of Wall Street’s most respected strategists remain convinced that the long-term bull market is far from over.

The battle between higher interest rates and long-term concerns about debt, inflation, and geopolitical instability will likely determine gold’s next major move.

For now, all eyes are on the $4,000 level.

Whether it becomes a launching pad for the next rally or a sign of deeper weakness could shape the outlook for gold investors for the rest of 2026 and beyond.