Editor’s Note
This article examines the recent extreme volatility in precious metals markets, highlighting the sharp reversal following a record rally. It serves as a timely reminder of the risks inherent in chasing momentum and the importance of a disciplined investment strategy.
Last week, the gold and silver markets witnessed such volatility that investors were left stunned. On Friday, ETFs linked to gold and silver recorded a drop of up to 23 percent in a single day. The primary reason for this was heavy profit-booking by investors after prices reached record highs. In fact, January proved to be a historic month for both metals. Silver saw a massive surge of 56 percent. Meanwhile, gold rose by more than 20 percent in dollar terms. However, as uncertainty regarding the US Federal Reserve increased and the dollar strengthened, market sentiment reversed.
In January, silver touched an all-time high of $120 per ounce, after which discussions around it intensified. Several experts even began calling silver “Gold on Steroids.” Citigroup has set a new target of $150 per ounce for silver. Meanwhile, some analysts believe that if conditions remain favorable, the price could even reach $170.
On the other hand, not everyone is so enthusiastic. Former JPMorgan strategist Marko Kolanovic has warned that the rally in silver has been excessively sharp. If speculative activity weakens, prices could see a decline of up to 50 percent. This means silver presents both opportunity and risk.
While silver is showing greater volatility, gold continues to be identified as a safe investment. UBS has forecast that the price of gold could reach $6,200 per ounce in 2026. Deutsche Bank and Société Générale also believe gold could touch the $6,000 level. Experts say that although there may be intermittent declines, the demand for gold will remain strong in the long term.
Market experts believe that volatility in both gold and silver has now become the new normal. Investors should avoid making hasty decisions and invest with an understanding of the risks. According to a report published in ET, while the rally in silver is attractive, it also carries a higher risk of decline. Meanwhile, gold is still considered a reliable option for the long term. Overall, the precious metals market in 2026 is set to remain full of excitement, where only a wisely taken decision can yield profits.