# Is gold really falling, or changing its role in the financial system?
Gold is not falling because it is failing.
Gold is falling because it has become the financial system’s main source of liquidity.
March 2026 marks a turning point.
After reaching a historic high of $5,414 an ounce in January, gold corrected sharply towards the $4,400 zone. At the same time, oil is trading above $110, the Strait of Hormuz remains under tension, global debt exceeds $315 trillion according to the Institute of International Finance, and the Federal Reserve is maintaining a restrictive stance.
At first reading, the movement seems incoherent.
In reality, it is deeply rational.
We are not facing a failure of gold.
We are facing a regime change.
The liquidity paradox
When a financial system comes under strain, investors do not only seek safety. They seek cash.
And the fastest way to obtain liquidity is to sell the assets that have risen the most.
Gold gained more than 60% in twelve months. It became one of the few liquid assets carrying significant gains. So it was sold. Not because it lost its safe-haven status, but because it is one.
Gold is not falling because it is failing.
It is falling because it is working.
In periods of acute stress, it absorbs pressure, supplies liquidity and allows balance sheets to breathe. This role is not always spectacular. It is structural.
The dollar factor and monetary rigidity
The Federal Reserve is keeping rates high in the face of persistent inflation, fuelled in part by the energy shock. Fed Funds futures continue to anticipate gradual adjustments, but without a rapid return to an accommodative policy.
A firm dollar exerts mechanical pressure on metals priced in the US currency. This dynamic partly explains the recent correction.
But this reasoning is incomplete if sovereign balance sheets are ignored.
US public debt exceeds $34 trillion.
The euro area operates in a fragmented budgetary environment, with structurally high debt levels in France and Italy.
The longer rates stay high, the more fragile fiscal sustainability becomes.
The more fragile sustainability becomes, the more relevant gold’s insurance function grows.
Central banks: the invisible bedrock
According to the World Gold Council, central banks acquired 863 tonnes of gold in 2025 and are expected to maintain a pace close to 800 to 900 tonnes in 2026.
China is continuing its gradual accumulation.
Central European countries are reinforcing their reserves.
Diversification away from the dollar remains an underlying trend.
Even Turkey, which temporarily mobilised nearly 60 tonnes to stabilise its currency, had sold 159 tonnes in 2023 before returning as a massive buyer. Tactical sales do not challenge the long-term strategy.
Gold is not a speculative asset for central banks.
It is a balance-sheet asset.
Silver: an amplifier, not a substitute
Silver moves in a complementary dynamic. Unlike gold, it combines a residual monetary function with structural industrial demand, notably in photovoltaics and energy technologies.
The gold/silver ratio stands around 64 at the end of March. This level remains historically intermediate. It signals neither excessive euphoria nor extreme imbalance.
The modern average of the ratio oscillates between 70 and 75. Periods of systemic stress can push it beyond 100. Industrial expansion cycles can compress it towards 50 to 60.
Silver remains more volatile than gold. It amplifies rising phases as well as corrections. It is not the bedrock of a wealth portfolio, but a cyclical accelerator.
Oil, inflation and the monetary regime
A durably high barrel acts as a global tax. It feeds imported inflation in Europe, rigidifies monetary policies and accentuates budgetary imbalances.
The oil-dollar-gold link is central.
An oil shock supports the dollar in the short term.
But if it persists, it weakens monetary stability in the medium term.
The history of oil shocks shows that gold does not always react immediately. It adjusts when balance sheets deteriorate durably.
2026 to 2028 outlook: a new volatility regime
We are probably not at the end of the bull cycle.
We are at the end of the linear bull cycle.
On a six-month horizon, a consolidation phase between $4,200 and $5,000 remains plausible, in an environment dominated by monetary policy adjustments and sovereign balance-sheet management.
On a one-year horizon, if global debt continues to grow faster than nominal GDP and if central banks maintain their diversification, a gradual return towards historic highs appears coherent.
At two years, the determining factor will be neither geopolitical noise nor speculation, but the real trajectory of Western public finances and the ability of central banks to maintain confidence in their currencies.
Gold could move within a widened corridor, with correction amplitudes more marked than those observed between 2022 and 2025. A regime of increased volatility does not mean a structural reversal. It means a market that has become systemic.
The current correction does not sign the end of gold’s relevance.
It simply invalidates the idea that a safe-haven asset rises in a straight line.
Gold does not react to headlines.
It reacts to balance sheets.
And those balance sheets, whether American, European or Asian, continue to send the same message: monetary stability is no longer a given, it has become a fragile objective.
In this context, gold is neither an emotion nor a fashion.
It is an equilibrium variable.
Mini-Glossary: Understanding gold, silver and the macroeconomic context
Balance-sheet asset
An asset recorded on the balance sheet of a central bank or a state as a strategic reserve. Gold is considered a balance-sheet asset because it strengthens an institution’s financial credibility.
Safe-haven asset
An asset sought during periods of economic or geopolitical uncertainty. It is expected to preserve value when other markets become unstable.
Physical asset
Metal genuinely held in the form of bars or coins. It does not depend on a financial intermediary to exist.
Paper asset
A financial product used to invest in gold or silver without owning the metal (ETFs, futures contracts).
Central bank
The institution responsible for managing the currency and monetary policy of a country or economic area. It often holds gold as a strategic reserve.
Oil shock
A sudden and lasting rise in the price of oil. It can trigger inflation and unbalance public finances.
Correction
A temporary fall in prices after a strong rise. It does not necessarily imply a trend reversal.
Opportunity cost
The potential return forgone by choosing one investment over another. When interest rates are high, holding gold may seem less attractive in the short term.
Sovereign debt
Debt issued by a state to finance its spending. High debt can strengthen the appeal of gold as wealth protection.
Strong dollar
A situation in which the US dollar appreciates against other currencies. As gold is priced in dollars, a strong dollar can temporarily weigh on its price.
ETF (Exchange Traded Fund)
An exchange-traded fund used to invest in gold or silver without holding the physical metal.
Inflation
A general rise in prices that reduces purchasing power. Gold is often seen as long-term protection against inflation.
Liquidity
The ability of an asset to be sold quickly without a major impact on its price. Gold is considered one of the most liquid assets in the world.
Restrictive monetary policy
A central bank stance aimed at maintaining or raising interest rates to control inflation.
Gold/silver ratio
The relationship between the price of an ounce of gold and that of an ounce of silver. It helps observe phases of relative outperformance between the two metals.
Volatility regime
A market phase characterised by large and rapid price variations. It often reflects heightened uncertainty about the economic outlook.
Store of value
An asset intended to preserve purchasing power over time. Gold has historically been used as a store of value.
Spot
The current price of a metal for immediate delivery on the international market.
Policy rates
Rates set by a central bank to influence credit and the economy.
Real rates
Interest rates adjusted for inflation. They strongly influence the attractiveness of gold.
Volatility
The amplitude and frequency of an asset’s price variations. High volatility indicates an unstable market.
*Updated on 27 September 2026.*
Frequently asked questions about gold
Why is gold falling if it is supposed to be a safe-haven asset?
Because in periods of acute stress, investors do not only seek safety: they seek cash, and the fastest way to raise liquidity is to sell the assets that have risen the most. Gold gained more than 60% in twelve months and became one of the few liquid assets carrying significant gains, so it was sold, not because it lost its safe-haven status but precisely because it fulfils that status. In stressed markets, gold absorbs pressure, supplies liquidity and allows balance sheets to breathe, a structural role rather than a spectacular one. Following the gold price in real time shows that corrections of this kind have historically prepared the next phase of the cycle rather than ending it, because the underlying causes of monetary fragility remain intact.
Does a strong dollar explain the recent correction in gold?
Partly, but not entirely. A firm dollar exerts mechanical pressure on metals priced in the US currency, and the Federal Reserve’s restrictive stance in the face of persistent, partly energy-driven inflation reinforces that pressure. Fed Funds futures continue to anticipate gradual adjustments, without a rapid return to an accommodative policy. Yet this reasoning remains incomplete if sovereign balance sheets are ignored: US public debt exceeds $34 trillion, and the euro area operates in a fragmented budgetary environment with structurally high debt levels in France and Italy. The longer rates stay high, the more fragile fiscal sustainability becomes, and the more relevant gold’s insurance function grows. Understanding the relationship between gold and purchasing power helps read this configuration lucidly.
Why do central banks keep buying gold during a correction?
Because gold is not a speculative asset for central banks: it is a balance-sheet asset. According to the World Gold Council, central banks acquired 863 tonnes in 2025 and are expected to maintain a pace close to 800 to 900 tonnes in 2026. China is continuing its gradual accumulation, Central European countries are reinforcing their reserves, and diversification away from the dollar remains an underlying trend of the international monetary system. Even Turkey, which temporarily mobilised nearly 60 tonnes to stabilise its currency, had sold 159 tonnes in 2023 before returning as a massive buyer, proof that tactical sales do not challenge the long-term strategy. Our gold guide explains how this institutional demand forms a structural floor beneath the market.
Should a wealth portfolio favour gold or silver in 2026?
The two metals play different and complementary roles. Silver combines a residual monetary function with structural industrial demand, notably in photovoltaics and energy technologies, and the gold/silver ratio around 64 at the end of March sits at a historically intermediate level, signalling neither excessive euphoria nor extreme imbalance. Silver remains more volatile than gold and amplifies both rising phases and corrections: it is not the bedrock of a wealth portfolio but a cyclical accelerator. Gold, by contrast, acts as the equilibrium variable of a patrimonial allocation. Certified gold bars remain the reference format for structuring substantial wealth over the long term, with guaranteed purity and easy resale on the international market.
Is the current correction an entry window for buying physical gold?
On a six-month horizon, a consolidation phase between $4,200 and $5,000 remains plausible in an environment dominated by monetary policy adjustments and sovereign balance-sheet management. On a one-year horizon, if global debt keeps growing faster than nominal GDP and central banks maintain their diversification, a gradual return towards historic highs appears coherent. The current correction does not mark the end of gold’s relevance; it simply invalidates the idea that a safe-haven asset rises in a straight line. Gold does not react to headlines, it reacts to balance sheets. Investors who wish to build a position progressively in physical metal can book an appointment with our experts to define an allocation suited to their objectives and their horizon.
The mechanics of rates, the dollar and debt are examined in detail in our dedicated analysis: why gold holds despite rising rates and a stronger dollar.