The unexpected decline in the price of gold from its historic highs in the first quarter of 2026 has made enthusiasts of the “yellow metal” particularly hesitant. A number of factors contributed significantly to this hesitation, such as the Bank of Greece’s persistently high spread between the buy and sell prices of the gold lira, the rise of the dollar, and yields on government bonds.
According to the Daily Price Bulletin of July 2, 2026, the Central Bank was buying the gold lira at 811.04 euros and selling it at 950.24 euros, while Piraeus Bank was buying at 812 euros and selling at 938 euros.
On the other hand, analysts as a whole continue to believe that the decline in gold prices is temporary and may even present an opportunity for gradual investments, as all the factors that contributed to the sustained historic highs—such as purchases by central banks, as well as ever-increasing government debt, remain fully in effect.
According to the World Gold Council’s annual survey for 2026, “74% of central banks believe that the proportion of global foreign exchange reserves held in dollars will be lower over the next five years, while gold’s share is expected to increase. For the gold market, this shift represents a significant and enduring driver of demand, often acting as a counterweight to short-term pressures from interest rates or movements in the dollar.
In the short term, the gold market will likely remain highly sensitive to inflation data and statements by Fed officials. A further rise in real U.S. Treasury yields or a significant strengthening of the dollar could keep pressure on the precious metal.
The Fed’s recent meeting created a short-term “headwind” for gold, but did not overturn its long-term investment track record. Rising budget deficits, high U.S. public debt, and the continued accumulation of gold by central banks remain the key pillars supporting the precious metal’s position in global investment portfolios.
On the other hand, Deutsche Bank has downgraded its gold price forecasts, as investors are becoming more cautious about the outlook for U.S. monetary policy and investment demand for the precious metal is declining. According to the bank, the price of gold is now expected to reach $4,300 per ounce in the third quarter of 2026 and $4,800 in the fourth quarter.
Deutsche Bank’s more cautious estimates followed Goldman Sachs’ move, which lowered its forecast for the end of 2026 to $4,900 per ounce, as it does not anticipate interest rate cuts by the U.S. Federal Reserve this year.
“Although the precious metal started the year with strong momentum and reached new all-time highs, the subsequent period was marked by a significant correction, which raised doubts about the sustainability of the upward trend seen in previous years,” notes Symeon Mavroudis (portfolio manager at Fast Finance AEPEY).
The main cause of the pressure on gold is linked to shifting expectations regarding U.S. monetary policy. The Federal Reserve continues to face inflationary pressures that remain above its 2% target, a fact that has led the market to price in an environment of higher interest rates for a longer period of time.
And given that gold does not generate cash flows or income, the rise in real government bond yields makes it comparatively less attractive and puts further downward pressure on prices. On the other hand, given that many countries are seeking to reduce their dependence on the dollar and U.S. Treasury bonds, a clear trend toward diversification of foreign exchange reserves has been observed in recent years.
In this context, gold serves as a strategic reserve asset, free from the credit risk inherent in other financial instruments. Furthermore, global fiscal developments continue to support gold.
For example, in the United States, fiscal deficits remain at particularly high levels, while public debt continues on a steady upward trajectory, even as the cost of servicing that debt rises rapidly due to higher interest rates.
In conclusion, the recent weakness in gold prices may prove to be more of a period of adjustment and less the beginning of a permanent downward trend, according to Symeon Mavroudis.
Returning to gold-backed drachmas, and according to data from the Bank of Greece, by the end of the second quarter of 2026, Greek investors had purchased just 714 gold pounds—a 24-year low (since 2002, when official data from the Bank of Greece became available)— while they sold 6,772 gold pounds.
For the first half of the year as a whole, purchases from the Bank of Greece totaled 2,095 gold pounds, and sales to the Bank of Greece totaled 13,950 gold pounds.