Gold experienced volatility in the first five months of 2026 despite a strong performance in 2025, when prices surged 44%. Following this rally, the metal initially maintained its momentum into early 2026, reaching a record high of $5,595, driven largely by increased demand from retail investors seeking exposure to the asset.

However, the nomination of Kevin Warsh as Federal Reserve chair in March contributed to a significant decline in gold prices, according to Metals Focus. The firm attributed the dip partly to uncertainty surrounding monetary policy and market reactions to leadership changes at the Fed.

Investor interest also waned amid geopolitical tensions, notably the conflict involving Iran. Many professional investors reportedly expressed disappointment over gold’s relative underperformance during a period typically associated with safe-haven buying. This subdued appetite reflected broader market hesitancy as the crisis unfolded.

Despite the recent setbacks, Metals Focus remains optimistic about gold’s prospects for the remainder of the year. The consultancy anticipates that a potential ceasefire between Iran and the United States could create improved conditions for the metal to rebound in the second half of 2026. This outlook suggests that gold could regain its appeal as a hedge against uncertainty once the geopolitical landscape stabilizes.