Editor’s Note
This article examines the recent high volatility in gold and silver markets, exploring the complex interplay of factors—from shifting U.S. monetary policy expectations to evolving safe-haven dynamics—that drove significant price movements last week.
What have been the main factors behind the recent declines in gold and silver?
“Last week was marked by high volatility; in fact, one of the most volatile trading days in history was recorded for both gold and silver. It is well known that gold acts as a safe-haven asset in times of political or geopolitical uncertainty. Last week, news from the United States about the new person heading the Federal Reserve helped partially reduce that uncertainty. However, if we compare the relevance of the news with the magnitude of the movement, it seems insufficient to justify the observed correction on its own. From WisdomTree’s analysis, no significant speculative frenzy is observed that would explain this behavior. In fact, if we look at the net positioning in the futures market, on the Comex, no extraordinarily high levels were observed in historical terms. In the case of silver, which suffered an especially severe correction, speculative net positioning was at average historical levels, even slightly below its average. Therefore, it is possible that the higher volatility has been driven by other less traditional channels, such as the retail segment or unregulated markets, like OTC.”
Do you see these declines as a technical adjustment or a structural change in the precious metals market?
“From WisdomTree, we consider that the fundamentals supporting both the price of silver and gold remain intact. It is important to remember that these are assets that have performed very solidly in recent weeks and quarters; in the case of gold, even if we broaden the perspective, we observe an impeccable upward trend. Therefore, what happened in recent weeks can be interpreted as a correction or a technical adjustment, probably aimed at draining some of the more tactical positioning that usually accumulates in the short term. In any case, we believe the fundamental factors supporting both assets remain unchanged.”
After these corrections, do you see medium- or long-term entry opportunities? How have gold and silver historically behaved after similar declines?
“We are talking about assets that just one or two weeks ago were trading at historical highs and that, over the past quarters, have been repeatedly setting new highs. The fundamental factors supporting both gold and silver remain intact; no relevant change has occurred that alters our underlying view. In a context of a structural upward trend and with solid fundamentals, this type of correction can be interpreted as an opportunity to take positions with a medium- and long-term horizon. In fact, this reasoning could be extrapolated to other assets: when the underlying trend is positive and the fundamentals support it, corrections are often seen as attractive entry points.”
“Our multifactor macroeconomic gold valuation model estimates that, with a 12-month view—that is, towards the last quarter of 2026—in a bullish scenario, the price could reach $6,000 per ounce. In the case of silver, which maintains a high historical correlation with gold—around 0.80–0.85 since the Lehman Brothers crisis in 2008—it is reasonable to think that if gold continues to rise, silver will too. According to our estimates, silver could be around $88–$90 per ounce in the last quarter of 2026. Furthermore, unlike gold, silver is not only a precious metal but also an industrial metal with multiple applications; this is compounded by a structural deficit in its supply, a factor that could act as an additional tailwind and support the continuation of its upward trend.”
What advantages do you see in investing through ETCs compared to physical gold or mining companies?
“There are different alternatives to gain exposure to gold, silver, or other precious metals. One of them is investing in mining companies. However, the correlation between the price of these companies and the price of the commodity is not perfect. Historically, it has not been a pure correlation, as when investing in a mining company we are assuming the company’s own risk: it may have an inefficient management team, high levels of debt, or even apply hedging strategies on the price of gold or silver that distort that relationship. Therefore, the stock’s performance does not depend exclusively on the metal’s behavior.”
“Another alternative is investing through futures. The drawback is that contracts expire and, if you want to maintain exposure, you need to roll them over. In commodities, including gold and silver, the phenomenon of contango can occur, which implies that renewing the contract generates a cost that drains profitability. Again, this makes it difficult for the instrument’s performance to purely replicate the price of the underlying asset.”