Gold, silver prices see steepest decline in years: Here's why
What's the story
Gold and silver prices have witnessed their biggest daily drops in years, ending a stunning rally in precious metals. Spot gold fell as much as 6.3% to just under $4,100 per troy ounce while silver fell more than 8% in its worst day since 2021. The fall is attributed to easing trade tensions between the US and China, a stronger US dollar, and technical indicators showing overbought conditions.
Market insights
Is this the start of a correction?
Trade Nation senior market analyst David Morrison noted that gold had several attempts to push above $4,400 since last Thursday but faced resistance each time. He questioned if this decline is the start of a much-needed correction after an incredible year-to-date rally. Morrison said the first major test to the downside comes around $4,000 but buyers could return around $4,200.
Investor sentiment
Investors bought the dip last Friday
Despite the recent market fluctuations, investors remain optimistic about gold. Last Friday, when gold briefly fell more than 1.5%, investors bought the dip. This was a rare pullback during its recent surge as precious metals and equities hit all-time highs in October. Sevens Report Research founder Tom Essaye told Yahoo Finance that "this is just a bump in the road," citing elevated inflation and low real interest rates as factors still favoring gold prices.
Future projections
Wall Street remains bullish on gold
Wall Street remains bullish on gold, with Bank of America analysts maintaining their "long gold" recommendation and predicting a peak of $6,000 per ounce by mid-2026. Goldman Sachs has raised its price target for gold to $4,900 per troy ounce by the end of next year from an earlier estimate of $4,300. JPMorgan analysts also predict that the yellow metal could hit $6,000 per ounce by 2029.