Gold Prices Are Well Below January Highs. Buy the Dip or Wait for More Weakness?

Gold has fallen well below its January highs as robust U.S. employment data reignites rate-hike fears, but Ronnie Stoeferle argues this is a classic "base camp" pause before the next leg higher in a remonetization-driven secular bull market.

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Gold Prices Are Well Below January Highs. Buy the Dip or Wait for More Weakness?

Gold prices have pulled back sharply from their January 2026 highs near $5,500 per ounce, testing downside support levels as stronger-than-expected U.S. employment data reignited expectations for higher-for-longer interest rates. The move has left many gold bulls questioning whether this is a healthy correction in an ongoing secular bull market or a warning sign of overheating that requires further weakness before the next leg higher. Ronnie Stoeferle, managing partner at Incrementum AG and co-author of the influential In Gold We Trust report (20th anniversary edition titled Back to the Monetary Future), views the current gold correction as a classic mid-cycle pause rather than the end of the bull market. In a recent Kitco interview with Jeremy Szafron, Stoeferle likened the situation to climbing Mount Everest: “You cannot just run up the Everest. At some point you have to stop, go to the base camp, rest there for a couple of days, get used to the altitude, get used to the thin air, and then you can continue climbing.” This analogy captures the essence of the current gold pullback. Gold delivered more than 60% returns in dollar terms the previous year — an exceptional move for a large asset class. “People tend to forget gold had a return of more than 60% in dollar terms last year,” Stoeferle noted. “We really have to digest this move. We’re sitting now in some sort of a base camp.” For investors asking is gold a good investment right now and should I buy gold now, Stoeferle’s framework suggests the pullback is an opportunity to position for the next leg higher in a remonetization-driven secular bull market — but only for those with a structured process and long-term conviction.

Why Gold Is Correcting: The Immediate Catalysts

The immediate trigger for the gold price correction was the stronger-than-expected U.S. jobs report from the previous week. Nonfarm payrolls significantly beat expectations, wage growth remained firm, and the unemployment rate held steady. Markets quickly repriced Federal Reserve rate expectations, shifting from anticipated cuts to the possibility of one or even two rate hikes later in 2026, with up to three hikes priced in by 2027. This “huge U-turn” in interest-rate expectations, as Stoeferle described it, drove higher bond yields and a stronger U.S. dollar — classic headwinds for gold. The metal tested the 20% setback zone outlined in the In Gold We Trust report before finding tentative support near the $4,300 level. Stoeferle noted that this is not a full “risk-off panic.” Stocks have been bouncing, and oil has pared some of its surge. Yet gold remains under pressure. He drew a historical parallel: gold often drops early in geopolitical or economic shocks because yields rise and markets assume central banks cannot cut rates. “Then as the crisis plays out, gold recovers because the debt and liquidity problem comes back into focus.” The current episode fits this pattern. While the jobs data provided the spark, Stoeferle believes the broader capital cycle is also at play: massive IPOs, Gulf sovereign funds funding pipelines and infrastructure, and OECD countries ramping up defense spending are all competing for capital.

Is This a Healthy Correction or the End of the Bull Market?

Stoeferle is clear: this is a healthy mid-cycle correction, not the end of the secular bull market. Several indicators support this view:

• Commitment of Traders (COT) Report: Positioning at the January all-time highs was not extreme enough to signal the top of a secular bull market.

• Gold-Silver Ratio: The ratio remains elevated (trading in the high 50s). In past bull market tops (e.g., 1980s at 16:1 or 2011 around 30:1), silver significantly outperformed gold. That has not happened yet.

• Mining Stocks and M&A: While some positive moves and sensible M&A have occurred, there has been no “euphoria” or “stupid M&A deals” that typically mark the end of a bull market.

• ETF Flows: Record outflows from gold ETFs in March reflect Western financial investors turning bearish quickly — classic pro-cyclical behavior.

“Bull markets end in euphoria,” Stoeferle said. “We haven’t seen those really stupid M&A deals so far. So this is telling me, well, we’ve had a good run. This is some sort of a healthy, let’s say, like mid-cycle correction that we’re seeing.” He also highlighted counter-cyclical buying from Asian buyers and central banks, which continues even as Western investors sell. This divergence reinforces his longer-term thesis. The In Gold We Trust report outlines six vectors of gold’s remonetization: central-bank buying, private-sector reallocation, central-bank balance-sheet recapitalization, tokenization/digitization, and potential re-engagement by “gold-light” Western countries (e.g., Canada, Australia, Japan, UK). Not all vectors need to fully play out for significantly higher prices.

The $8,900 Long-Term Target and Base-Case Scenario

Stoeferle’s base-case gold price prediction remains $8,900 by the end of the decade — a level that assumes financial stress eventually leads to central banks flooding the system with liquidity. The $4,800 target from the 2020 report was reached early, validating the inflationary decade thesis but also requiring investors to digest the move. From current levels, the path to $8,900 implies a compound annual growth rate of approximately 14.5% through 2030 — below the 19.7% CAGR achieved during the initial phase of the golden decade. Stoeferle views gold as “still dirt cheap” in monetary terms, especially if this is a true remonetization cycle rather than a normal gold cycle. He expects the market to test the psychologically important $4,000 level. “The market usually wants to see the round number. So I think that we will test the $4,000. But I think you really want to be an aggressive buyer at those levels.”

Liquidity Panic Lessons from History

Stoeferle compared the current correction to the 2008–2009 period, when gold initially sold off amid liquidity panic (Lehman collapse, AIG concerns, Fannie Mae/Freddie Mac) before recovering strongly as fiscal stimulus and central-bank intervention followed. Gold’s super-liquidity — with daily traded value reaching $550 billion on some days — makes it one of the first assets sold in panic mode. However, this liquidity-driven selling “laid the foundation for the next leg up.” In the current environment, Stoeferle noted that Kevin Warsh (the new Fed chair) is taking a hawkish stance initially, but the market understands there are limits to how aggressively he can hike. Warsh’s preference for the trimmed PCE inflation measure (which missed the 2021 inflation wave) is seen by Stoeferle as further evidence that the Fed has de facto accepted structurally higher inflation.

Implications for Gold Bulls and Gold Investment Strategy

For gold bulls navigating the current gold correction, Stoeferle’s advice is clear: maintain a structured process. His own funds switched to a defensive posture in January based on signals such as the active AUM indicator. He recommends preparing a “game plan” with quality names, predefined buy levels, and “stink bids” for panic levels.

Key signals to watch for a bottom include:

• Extreme ETF outflows

• Panic in sentiment indicators (e.g., Sentiment Trader)

• Extreme positioning in the Commitment of Traders report

Stoeferle emphasized that timing the exact bottom is difficult. “A good trade shouldn’t be easy,” he said. “You have to have a structured process.” For investors asking is gold a good investment right now and should I buy gold now, the message is one of patience and preparation. The pullback is painful but expected after last year’s outsized gains. Those with cash ready and a list of high-quality assets can view this as a strategic entry point, particularly if gold tests $4,000 or lower.

Risks and the Path Ahead

While the long-term outlook is constructive, near-term risks remain:

• Persistent strong U.S. data could keep yields elevated and delay rate cuts.

• Further geopolitical escalation (or de-escalation) could create short-term volatility.

• Mining stocks have already seen significant damage, with some names in panic territory.

Stoeferle noted that the sector has done a good job maintaining pristine balance sheets and strong free cash flow. Top 10 gold producers tripled free cash flow to nearly $30 billion last year, with margins up almost sixfold since 2015. Yet the sector still represents only about 1% of the global equity market, leaving significant room for capital inflows if generalist investors eventually rotate in. His advice to mining executives: stop talking like geologists and start explaining cash flow, balance sheets, and execution plans in clear, simple terms to attract generalist capital.

Conclusion: A Base Camp Pause in a Secular Bull Market

Gold prices are well below January highs, but Ronnie Stoeferle sees this as a healthy digestion period — a “base camp” pause before the next leg higher in a remonetization-driven secular bull market. The current gold correction is driven by shifting rate expectations and liquidity dynamics, not a fundamental change in the long-term thesis. For gold bulls, the question is not whether to abandon the trade but how to position for the eventual recovery. Those with a structured process, cash on hand, and a focus on quality assets may view the current gold pullback as an opportunity to buy the dip — particularly if prices test the $4,000 level Stoeferle expects. The remonetization thesis — backed by six vectors including central-bank buying, private reallocation, and potential Western re-engagement — suggests gold remains “dirt cheap” in monetary terms. Investors who focus on the long-term fundamentals, maintain discipline through volatility, and prepare for the next leg higher are well-positioned to benefit from what Stoeferle believes is still an inflationary and golden decade ahead.As always, the best time to invest in gold is when the market offers attractive risk-reward at depressed prices — and the current gold market correction may be providing exactly that setup for patient, long-term gold investors.

Sources

• Kitco interview with Ronnie Stoeferle and Jeremy Szafron (June 2026).

• In Gold We Trust report, 20th anniversary edition (Incrementum AG).

• Public U.S. employment data and Federal Reserve commentary (as referenced in transcript).

• Historical gold price performance and sector free cash flow data (public industry reports).

This article reflects information publicly available as of June 2026. Gold prices, interest rates, U.S. employment data, and mining sector fundamentals evolve rapidly. Investors must verify the latest developments and conduct independent research. Commodity and mining investments involve substantial risk of loss.