Summary
Spot gold and silver experienced their sharpest back-to-back declines in decades, but market participants and analysts broadly describe the move as a pronounced correction within an ongoing bull market for the metals. Several large banks and independent traders continue to expect gold to climb to new record levels later this year, even as near-term volatility and uncertainty for silver persist.
Market move
Spot gold plunged nearly 10% on January 30, marking its steepest single-session drop since 1983. That fall pushed prices below the roughly $5,000 per ounce milestone reached only days earlier and erased sizeable year-to-date gains. Silver suffered an even more dramatic single-session decline, tumbling 27% on the same day - its largest single-session fall on record. Over the course of the two most recent trading sessions, gold fell more than 13% and silver declined nearly 34%.
Context for the sell-off
Analysts attribute the abrupt reversal in part to an overextended rally that had taken gold from a peak of $5,594.82 to roughly $4,700 - a drop of nearly $900 from that high. Two notable catalysts cited were the nomination of Kevin Warsh as the next Federal Reserve chair by U.S. President Donald Trump and a decision by CME Group to raise margin requirements on precious metals futures. Those developments are seen as having accelerated selling pressure and discouraged some speculative positions.
Analyst reactions and outlook
Despite the severity and speed of the sell-off, many market participants see the pullback as temporary. "Although the fall was large and fast, it should also be remembered that we are currently at the same levels we saw just three weeks ago," said Ross Norman, an independent analyst. He characterized the movement as a significant correction that does not, in his view, indicate the end of the bull run.
Independent metals trader Tai Wong expects gold to consolidate in the near term before resuming an upward trajectory over the coming weeks and months. Analysts at WisdomTree noted that the pullback could dampen speculative buying and potentially create room for longer-term strategic buyers to re-enter positions.
Market expectations for monetary policy also support the case for higher gold prices later this year. Markets anticipate the Federal Reserve will cut interest rates twice in the current year, a dynamic that typically benefits non-yielding assets such as gold.
Major institutional forecasts remain bullish. UBS analyst Giovanni Staunovo said, "We look for gold to reach a new record high above $6,200/oz later this year." JP Morgan projects gold to reach $6,300/oz by year-end, according to the bank, while Deutsche Bank reiterated a $6,000 target for the year, citing sustained investor demand.
Silver outlook and distinctions
Expectations for silver are more mixed. Analysts point to silver's dual role as both a precious metal and an industrial input, which complicates demand forecasts. That dual status contributes to heightened uncertainty about silver's near-term path.
Near-term warnings
Not all analysts are confident that the market has found a bottom. "It is far too early to suggest gold has found a bottom yet," said Fawad Razaqzada, market analyst at City Index and FOREX.com, underscoring the possibility of continued volatility and further downside before a sustained recovery.
Implications
The sharp correction interrupted a rapid advance in precious metals prices and altered the balance between speculative and strategic holders. While many market participants continue to model higher prices for gold by year-end, the sell-off highlights the potential for abrupt shifts in sentiment driven by policy signals and margin rule changes.
Key data and quotes preserved in this report
- Spot gold dropped nearly 10% on January 30, its steepest fall since 1983.
- Gold fell more than 13% across the last two trading sessions; silver fell nearly 34% over the same period.
- Gold’s prior record peak cited at $5,594.82; recent levels around $4,700.
- Key forecasts: UBS above $6,200/oz later this year; JP Morgan $6,300/oz by year-end; Deutsche Bank $6,000 for the year.