After a historic, months-long rally, gold and silver faced a stunning price drop late last week after President Donald Trump picked Kevin Warsh to lead the Federal Reserve—but analysts say the dip isn’t indicative of a long-term decline and prices could soon recover.
Gold and silver stunned on Friday by shedding much of their value, with silver’s price dropping as much as 30% and gold’s price falling nearly 10%, a dramatic reversal from a price surge that saw silver top a record $120 last week and gold surge past $5,600 for the first time.
Some analysts say the drop might be short-lived, including Sucden Financial analysts, who said Monday the precious metals still hold long-term appeal as safe-haven investments and projected they could see a “modest near-term recovery in the coming days.”
JPMorgan analysts remain bullish on gold, raising their year-end forecast for the precious metal to a record $6,300, saying the “long-term rally in gold has not and will not be linear, so for now we once again digest, reset and repeat,” citing strong demand from central banks and investors.
Michael Hsueh, a metals analyst at Deutsche Bank, also suggested the downturn would be short-lived, retaining the bank’s year-end gold price prediction of $6,000 and saying “conditions do not appear primed for a sustained reversal in gold prices,” blaming volatility for the price dip rather than a collapse of confidence in gold.
Apurva Sheth at Samco Securities suggested the price dip was healthy and could let optimism cool for a while, setting the stage for prices to rise in the future, echoing other analysts that gold still holds long-term appeal as an investment.
What Are Gold And Silver’s Prices Today?
The prices of gold and silver are both slightly down today, though they have been volatile Monday morning. The price of silver is about $76.92 as of 1:30 p.m. EST, down about 2%. Gold’s price is $4,651.10 as of 1:30 p.m., also down about 2%. Gold hit a high of $4,905.60 earlier Monday, while silver hit a high of $88, both still far from the record prices they hit last week.
Why Did Gold And Silver Plunge Last Week?
The prices of gold and silver fell shortly after Trump announced Warsh as his pick for the next Federal Reserve chair. Warsh has historically been seen as hawkish on monetary policy and was considered less likely to slash interest rates—which typically causes metals prices to rise—than the other presumed candidates for chair of the Fed, though he had advocated for lower rates in recent months. Christopher Forbes, head of Asia and the Middle East at CMC Markets, told CNBC gold will remain volatile as markets await Warsh’s policy decisions. Gold and silver had also risen dramatically as the U.S. dollar weakened, but following Warsh’s nomination, the dollar strengthened. Some analysts, though, said such a dramatic fall in gold and silver prices couldn’t just be about Warsh alone. John Stepek, a metals writer for Bloomberg, said Warsh is part of the story, but suggested the crash was also because metals prices had “gone up too far, too fast, and it was just a matter of time before they ran into a brick wall.”
Key Background
In 2025, gold added as much as 65% to its value while silver rose a staggering 150%, and the metals continued their surge in the first few weeks of January, hitting highs above $5,600 and $120, respectively. Analysts attributed the price rally to a confluence of factors, including interest rate cuts in 2025, tariffs imposed early in Trump’s second term and increasing geopolitical tensions, including the U.S. capture of Venezuela’s Nicolas Maduro and increased tensions with Iran and European nations. Demand for both gold and silver as safe-haven assets rose as the dollar weakened, and demand for silver in particular increased because of its use in the tech industry. Concerns over the independence of the Fed also helped push up metals prices, as Trump repeatedly attacked chair Jerome Powell and the Justice Department launched an investigation into whether Powell lied to Congress over the Fed’s renovations. Prior to the price crash Friday, some analysts suggested the precious metals market was broken. Nicky Shiels, head of metals strategy at MKS PAMP, told CNBC earlier last week she felt the metals market is “broken given unheard-of volatility,” adding metals are being “overbought on a tactical basis,” while other analysts told CNBC the extreme price upswings did not match the increase in demand for the metals.
Source: forbes.com
