Gold and Silver Prices Tumble After Historic Rally—Analysts Say the Pullback Is Temporary
Gold and silver prices witnessed a sharp and unexpected decline late last week, rattling investors after months of a historic rally. The sudden drop followed US President Donald Trump’s decision to nominate Kevin Warsh as the next chair of the Federal Reserve. Despite the steep fall, analysts insist the downturn does not signal a long-term collapse and believe precious metal prices could rebound in the near future.
On Friday, silver prices plunged by as much as 30%, while gold fell nearly 10%, marking a dramatic reversal from last week’s record highs. Just days earlier, silver had surged past $120 an ounce, and gold had crossed the $5,600 mark for the first time in history. The rapid decline shocked markets that had grown accustomed to relentless gains.
Several analysts have played down concerns of a prolonged downturn. Sucden Financial said the recent sell-off appears short-lived, noting that gold and silver continue to attract long-term interest as safe-haven assets. The firm expects a modest recovery in the coming days as market sentiment stabilises.
JPMorgan remains strongly bullish on gold, raising its year-end price target to a record $6,300. Analysts at the bank emphasised that gold’s long-term rally is rarely smooth, describing the recent drop as a natural phase of consolidation rather than a breakdown in fundamentals. Strong buying from central banks and sustained investor demand continue to support their optimistic outlook.
Deutsche Bank metals analyst Michael Hsueh echoed similar views, maintaining the bank’s year-end gold forecast of $6,000. He attributed the recent volatility to market overreaction rather than a loss of confidence in gold, stating that conditions do not suggest a sustained reversal in prices.
Apurva Sheth of Samco Securities described the correction as healthy, arguing that it allows excessive optimism to cool and creates room for prices to move higher over the longer term. Like other analysts, she highlighted gold’s enduring appeal as a store of value during periods of economic and geopolitical uncertainty.
As of Monday afternoon, prices remained volatile but were well off their recent peaks. Silver was trading around $76.92 an ounce, down about 2%, while gold stood near $4,651, also down roughly 2%. Both metals briefly rebounded earlier in the day but remained far below last week’s record levels.
Analysts largely agree that Warsh’s nomination triggered the sell-off, as he is widely viewed as hawkish on monetary policy and less inclined to aggressively cut interest rates—moves that typically benefit precious metals. However, many experts caution that the crash cannot be attributed to one factor alone, pointing instead to an overheated market that had risen too far, too fast.
Despite the turbulence, the broader outlook for gold and silver remains positive, with analysts suggesting the recent plunge is a pause in a powerful long-term uptrend rather than the end of it.
