Has gold really entered a bear market?

In the first half of 2026, the gold market experienced a roller coaster ride: in January, the gold price repeatedly broke historical highs, reaching $5405 per ounce; In June, it fell to $4002 per ounce, with a maximum drawdown of nearly 30%. Market panic is spreading, and the voice of 'the end of the gold bull market and the arrival of a bear market' is constantly heard. However, based on a comprehensive analysis of technical definitions, core driving logic, and market structure, gold is not currently entering a bear market, but rather a deep adjustment in the bull market process.

From the perspective of technical bear market standards, gold has not yet met the complete conditions. The international market usually uses "a price drop of more than 20% at a higher point, a decline lasting for more than 6 months, and a core upward logic reversal" as the three elements for determining a bear market. Although the current gold price has retreated nearly 30% from its peak, reaching the technical bear market decline threshold, the adjustment period is only over 4 months, far shorter than the historical bear market average duration of more than 6 months. More importantly, the underlying logic supporting the bull market in gold has not collapsed, and a single decline is not enough to determine a trend reversal.

The direct cause of the short-term correction is the rising expectation of interest rate hikes by the Federal Reserve and the strengthening of the US dollar. Since 2026, the US Iran conflict has continued to push up oil prices and exacerbate inflation stickiness. The June FOMC meeting released hawkish signals, with market expectations that the Federal Reserve will raise interest rates at least once this year. The US dollar index is strengthening, and the opportunity cost of holding interest free gold is significantly increasing, triggering a shift in funds from gold to US dollar assets. At the same time, the sharp rise in gold prices at the beginning of the year accumulated a large number of speculative bulls, and high-level profit taking erupted in a concentrated manner. Coupled with the off-season for physical gold consumption in summer, multiple negative resonances led to a rapid decline in gold prices.

But the core logic that supports gold in the medium to long term remains solid, which is the key to denying the bear market. Firstly, global central banks continue to make large purchases of gold, forming a rigid bottom support. In the first quarter of 2026, global central bank net purchases reached a historic high, and countries continued to increase their holdings in order to diversify their foreign exchange reserves and hedge against US dollar risks. This structural demand has not weakened due to short-term corrections. Secondly, the weakening of US dollar credit and the trend of de dollarization have not changed. The scale of US debt is high, the fiscal deficit is expanding, and the long-term depreciation pressure of the US dollar still exists. Gold, as a "super sovereign currency", has an irreplaceable value of hedging and anti inflation. Thirdly, geopolitical risks remain high. The conflicts in the Middle East, Russia Ukraine and other regions have been recurring, the global geopolitical landscape is fragmented, and the safe haven premium of gold has long existed. Fourthly, the stickiness of inflation has not dissipated, and the global inflation level is still higher than before the epidemic. The anti inflation attribute of gold continues to play a role.

From the perspective of market structure and capital flow, gold does not exhibit bear market characteristics. Although gold ETFs experience short-term net outflows and speculative fund reductions, these are more driven by short-term sentiment rather than long-term trend reversals. The report of the World Gold Council clearly states that the current callback is a "healthy adjustment" in the bull market. After cleaning up the speculative foam, long-term allocation funds are gradually entering the market. Historical data shows that there have been multiple deep pullbacks of over 20% during the gold bull market process (such as in 2013 and 2020), but none of them have changed the long-term upward trend.

Looking ahead to the future, it is highly likely that gold will experience short-term fluctuations to build a bottom and a medium to long-term rebound to rise. After the third quarter, the market may gradually digest the expectation of the Federal Reserve raising interest rates, coupled with the arrival of the peak season for physical gold consumption in China and India, the gold price is expected to return to the upward channel. Authoritative institutions such as CICC and the World Gold Council unanimously judged that the gold bull market is far from over, and the current adjustment is a good opportunity for layout.

Overall, the current significant pullback in gold is the result of a combination of short-term macro bearish sentiment, speculative fund outflows, and seasonal factors, rather than the onset of a bear market. Technical declines do not represent a trend reversal, and the expectation of short-term interest rate hikes by the Federal Reserve does not change the long-term support logic for gold. The monetary, safe haven, and anti inflation properties of gold remain strong, and the trend of central bank purchases and de dollarization continues to support gold prices. Investors do not need to be swayed by short-term fluctuations. They need to view adjustments rationally and adhere to long-term values in order to see the true context of the gold bull market.