Gold witnessed a dramatic slide of over 5% on Tuesday, marking its sharpest daily drop since 2013. Prices briefly plunged more than 6% before stabilising around $4,130, signalling a sudden pause after a relentless upward climb. Silver and platinum also mirrored the downturn, falling 6.7% and 7.2% respectively, despite having gained more than 60% this year.
This shift isn’t entirely unexpected. After months of record-breaking rallies, many investors are stepping back to lock in profits. Analysts describe the current movement as a technical correction rather than a sign of fading confidence, as the investor base for precious metals has grown substantially in recent months. Rapid gains had stretched prices beyond sustainable levels, prompting a natural cooldown.
Another factor weighing on gold is the strengthening US dollar, which makes the metal more expensive for buyers using other currencies, often leading to reduced demand.
Where Could Gold Be Headed?
Forecasts for gold remain optimistic despite the short-term dip. Some financial institutions now expect gold to reach as high as $5,000 an ounce by 2026. Others are more cautious but still positive, projecting prices between $3,000 and $4,000 over the next year or so. Earlier in the year, estimates were far lower, showing just how strongly sentiment has shifted.
Silver’s Outlook
Silver is also expected to climb further, with projections going up to $65 an ounce. However, analysts caution that rising liquidity and shifting demand could lead to volatile price swings. Even so, silver remains a preferred asset during economic uncertainty and potential interest rate cuts.