WGC Warns Gold Could Fall 37% from January Peak; Japanese Yen May Offer Support
The World Gold Council says gold prices could see a deeper correction if key support levels break, while a stronger Japanese yen and weaker US dollar may help limit further losses.
New Delhi | August 5, 2026 The World Gold Council (WGC) has warned that gold prices could decline significantly if crucial technical support levels are breached, even as it noted that a stronger Japanese yen and a weaker US dollar could help stabilize the precious metal.
Gold prices have already fallen sharply this year. After touching an all-time high of ₹1.76 lakh per 10 grams in January 2026, domestic prices have dropped to around ₹1.42 lakh per 10 grams, marking a decline of nearly ₹34,000.
According to the WGC, if international gold prices fall below the critical support level of $3,857 per ounce, the next major support could be around $3,500 per ounce. This would represent a correction of nearly 37% from the January 2026 peak.
The council noted that such a decline would be in line with previous major corrections in the gold market. Spot gold is currently trading well below its 52-week high, while global prices have weakened amid easing geopolitical tensions and changing market sentiment.
The report also highlighted the role of currency movements. A stronger Japanese yen and a weaker US dollar could improve demand for gold and provide price support. Additionally, future decisions by the US Federal Reserve on interest rates are expected to play a key role in determining gold's direction.
The WGC added that if the Federal Reserve keeps interest rates unchanged, a softer dollar could support gold prices. However, any future rate hikes could put additional pressure on the precious metal.
Market analysts also believe that developments in the US-Iran situation and global crude oil prices will continue to influence inflation expectations and investor demand for gold in the coming months.
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