Gold and Silver See Sharp Swings as Analysts Debate Rally’s Sustainability
Precious metals markets are experiencing significant volatility, with gold and silver prices whipsawing following a dramatic rally and subsequent sharp correction, according to analyst commentary.
The pullback, which accelerated on Friday, is being characterized by some market experts as a necessary and healthy correction. Yuxuan Tang, Asia head of macro strategy at J.P. Morgan Private Bank, described the preceding surge as “irrational” and stated the decline has flushed out speculative positioning. Despite the drop, prices remain substantially higher for the month, with spot gold cited at $4,695.84 an ounce—still up 13% in January.
Analysts at ING note that the scale of Friday’s decline far exceeded expectations and that near-term price direction will heavily depend on whether Chinese investors return as buyers after the retreat. They anticipate volatility to remain high, driven by macroeconomic uncertainty, shifting expectations for real interest rates, and the trajectory of the U.S. dollar.
In afternoon trading, futures contracts showed a partial recovery from earlier lows. Gold futures were up 0.6% at $4,775.20 a troy ounce, while silver futures staged a stronger rebound, rising 6.1% to $83.44 an ounce.
Despite the recent turbulence, the long-term appeal for both metals appears intact among some institutions. J.P. Morgan Private Bank has raised its year-end gold target to $6,150 an ounce, with a forecast range of $6,000 to $6,300. The bank’s view is underpinned by a broadly supportive policy backdrop and the longer-term erosion of global fiscal discipline, factors it believes remain unchanged.
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