Gold Down 12% But ING Forecasts CAD 6847/oz by Year-End | What Buyers Should Know

  Gold just did something strange. As missiles flew over the Middle East and the Iran conflict escalated into one of the most destabilizing geopolitical events in years, gold fell, not rose. Since the conflict began, gold has dropped roughly 12% from its January 2026 all-time high of CAD 7654/oz, trading near CAD 6477/oz at the time of writing. For investors who bought gold as a crisis hedge, that feels like a betrayal. But here is what most headlines are not telling you: this is a macro story, not a gold story. And ING, one of the world's largest financial institutions, just issued a forecast stating that gold will still reach CAD 6847/oz by year-end 2026. So what is actually happening? Why did gold fall during a crisis? And more importantly, should Canadian investors be buying right now? Here is the detailed overview. Why Gold Fell 12% | It Is Not What You Think Most people assume gold always rises during geopolitical conflict. That is only partially true. Gold performs best during financial crises and growth shocks, moments when real yields fall, and the US dollar weakens. Think 2008, think March 2020. In those moments, gold surged because the economic shock made cash and bonds less attractive. The Iran conflict is a different kind of shock entirely. It is a supply-driven energy shock, and supply shocks do the exact opposite to gold. Here is the chain reaction: Higher oil prices push inflation expectations higher Rising inflation gives the Federal Reserve less room to cut rates Fed stays hawkish, keeping real yields elevated A stronger dollar makes gold more expensive for international buyers All three forces combine to pressure gold prices lower ING commodities strategist Ewa Manthey explained it directly: "The setback keeps the ceasefire timeline uncertain and inflation risks elevated, reinforcing the higher-for-longer rate narrative that has weighed on gold throughout the conflict." We saw the same dynamic in 2022 when Russia invaded Ukraine. Gold initially spiked, then sold off for six months as energy-driven inflation pushed yields and the dollar higher. The same playbook is unfolding today, only faster. Adding to the pressure, April's US payrolls report showed employers added jobs for a second consecutive month, with unemployment holding steady at 4.3%. That gives the Fed little justification to rush rate cuts, keeping yields elevated and maintaining a headwind for gold in the near term. Why ING Still Sees CAD 6847 | The Structural Bull Case Despite the near-term turbulence, ING's Ewa Manthey is not backing down from her CAD 6847/oz year-end forecast. When you look at the structural forces underneath gold's surface volatility, it is not hard to see why. 1. Central Banks Are Still Buying Relentlessly This is the single most important driver of gold's long-term support, and it barely gets covered in mainstream financial media. China's central bank added 8.1 tonnes of gold in April alone, the most in a single month since December 2024, extending its buying streak to 15 consecutive months. Total Chinese gold holdings now stand at approximately 2,305 tonnes. Poland increased its reserves by 31 tonnes in Q1 2026. Globally, central banks are buying approximately 760 tonnes of gold annually, nearly double the pre-2022 average. The reason is straightforward: de-dollarization. Nations across the emerging world are reducing their exposure to US dollar reserves following sanctions against Russia, and gold is the only globally recognized reserve asset that carries zero counterparty risk and cannot be frozen by any government. As Manthey stated: "Reserve diversification remains supportive for gold over the medium term, even as some central banks sell to shore up liquidity." 2. ETF Inflows Are Turning Back On Between July and September 2025, global gold-backed ETFs saw holdings increase by 222 tonnes, the fastest quarterly pace in years. Some withdrawals followed as the Iran conflict strengthened the dollar, but ING expects inflows to resume as the Federal Reserve shifts back toward rate cuts. The logic is simple: lower rates reduce the opportunity cost of holding non-yielding assets like gold. When bonds and money market accounts yield less, institutional capital flows back into gold. That rotation has not happened yet, but ING and most major banks believe it is coming before year-end. The Federal Reserve Rate Cut Catalyst The CME FedWatch Tool currently shows a 71% probability of a Fed rate cut in December 2026. ING projects a total of 50 basis points in cuts throughout 2026, though strategists warn the Fed could move faster and deeper than expected if economic conditions deteriorate under the weight of ongoing trade tensions. Lower rates mean lower real yields. Lower real yields are the single most reliable driver of gold price appreciation. When the return on bonds shrinks, gold's lack of yield stops being a disadvantage. Institutional money moves in, and prices rise. There is another layer here that most analyses ignore entirely: the Fed's independence itself is under threat. President Trump has reportedly made his pick for the next Fed chair, a candidate markets expect to be more dovish than Jerome Powell, whose tenure ends this week. If political pressure on the Fed intensifies, US financial credibility suffers, and gold benefits directly as investors seek assets outside the dollar system. The Moody's Downgrade and the US Debt Spiral In May 2025, Moody's downgraded the US sovereign credit rating, making it the third major rating agency to strip the US of its top-tier AAA status. US federal debt is now spiraling past $36 trillion, with roughly $2 trillion added in the current fiscal year alone. This is not a short-term problem. This is a structural, decade-long shift in the credibility of the US dollar as the world's reserve currency. Gold is the direct beneficiary of this trend. The decades-long march away from dollar dominance is not ending anytime soon. If anything, Moody's downgrade is accelerating it. What Major Banks Are Forecasting | The Institutional Consensus ING is not alone. Here is what the world's most influential financial institutions are projecting for gold in 2026: Institution Price Target Key Drivers ING CAD 6847/oz by year-end Central banks, ETF inflows, Fed cuts, de-dollarization HSBC CAD 6847/oz possible Geopolitical tensions, surging government debt, and central bank demand UBS CAD 6477/oz minimum Lower real yields, weaker dollar, rising debt, geopolitical risk JPMorgan CAD 6900/oz avg Q4 Central bank demand, investor diversification UBS put it plainly: "We like to buy the dip in gold. Investors remain underallocated." The bank recommends a 3% to 7% portfolio allocation to gold, arguing that most retail and institutional investors still hold far less gold than their risk profiles justify. Gold is currently trading approximately 16% below its all-time high. By institutional consensus, that gap is not a warning signal. It is a buying window. When Will the Headwinds Clear? ING's Manthey identifies the key catalyst for gold's recovery as progress in the Iran peace talks. A durable ceasefire would bring oil prices down, ease inflation expectations, give the Fed room to cut rates, weaken the dollar, and trigger a large-scale institutional reallocation back into gold. If CPI data due this Tuesday comes in softer than expected, that alone could trigger an immediate 5% to 8% rally by pulling forward Fed rate cut expectations. Every major institution agrees: the structural forces behind gold, including central bank buying, de-dollarization, fiscal deterioration, and geopolitical uncertainty, remain fully intact. The near-term macro noise does not erase them. It simply creates a temporary discount. As Manthey concluded: "Once those headwinds begin to ease, gold's underlying support should reassert itself." What Should Canadian Investors Do Right Now? The answer from virtually every major institution is the same: use this correction to build or add to your physical gold position. Here is why physical gold, not ETFs, is the right vehicle for most Canadian investors in this environment: No counterparty risk. Unlike gold ETFs, physical bars cannot be suspended, frozen, or devalued by a custodian's financial problems. No management fees are eating into your returns. A gold bar bought today retains 100% of its value appreciation. Real, tangible ownership. In a world where sovereign credit ratings are being cut and dollar credibility is being questioned, holding something physical matters. At Gold Stock Corp., we carry the full range of Aarus gold bars, featuring .9999 fine (24-karat) LBMA-approved bullion with individual serial numbers, certificates of authenticity, and SPECTROLAB-verified purity. Whether you are entering the market for the first time or adding to an existing position, Aarus bars offer institutional-grade quality at some of the lowest premiums over spot available from a US dealer today. Gold is currently trading at CAD 6477/oz, roughly CAD 1200 below its all-time high, with ING, JPMorgan, HSBC, and UBS all forecasting it will exceed CAD 6847 before December 2026. The question is not whether to buy gold. The question is whether you will buy before or after it gets there. Frequently Asked Questions Why did gold prices fall during the Iran conflict if gold is supposed to be a safe-haven asset? The Iran conflict is a supply-driven energy shock, not a financial crisis. Higher oil prices push inflation up, force the Fed to keep rates elevated, and strengthen the dollar, all of which are headwinds for gold. This is a temporary macro pressure, not a breakdown in gold's long-term value. Is ING's CAD 6847/oz gold forecast realistic? Yes, and ING is not alone. JPMorgan, HSBC, and UBS are all projecting similar price levels by year-end 2026. The forecast is supported by record central bank buying, expected Fed rate cuts, and ongoing de-dollarization across global reserves. Should I buy gold now or wait for prices to fall further? Major institutions, including UBS and ING, describe the current pullback as a buying opportunity, with gold trading 16% below its all-time high. Most strategists agree that waiting and missing the recovery carries more risk than buying at current levels. What is the difference between physical gold bars and a gold ETF? Physical gold bars give you direct ownership of a tangible asset with zero counterparty risk and no management fees. A gold ETF only provides price exposure and can be affected by custodian risks and fund structure issues. In today's uncertain economic environment, physical gold offers protection that paper gold cannot. What makes Aarus gold bars a good choice for Canadian investors? Aarus gold bars are .9999 fine (24-karat), LBMA-approved, and verified using SPECTROLAB technology for guaranteed purity. Every bar includes a unique serial number and a certificate of authenticity. Compared to established brands, Aarus delivers the same institutional quality at a significantly lower premium over spot price.