Gold prices slipped in early Asian trading, with spot gold down 0.2% at $4,018.77 an ounce. Despite expectations of a rebound after the metal approached $4,000, one economist sees more downside ahead.

Hamad Hussain at Capital Economics argues gold still faces pressure over the next 18 months. The firm projects prices could drop to $3,500 by end-2026 and $3,250 by end-2027, testing bullion investors' resolve.

Higher real yields from anticipated Federal Reserve tightening would make non-yielding gold less attractive. An equities selloff could intensify the decline, as investors typically liquidate quality assets like gold to meet margin calls during market stress.

The forecast suggests gold may have entered a prolonged correction phase, challenging recent gains that lifted prices toward record territory earlier this year.