Precious Metals Stage Recovery After Worst Week Since 1980
Gold and silver prices staged a significant rebound on Tuesday after suffering one of the most dramatic sell-offs in precious metals history. The recovery comes after gold plunged more than 21% from its record high and silver experienced its worst single-day decline since 1980.
Spot gold climbed approximately 5.5% to $4,913.97 per ounce on Tuesday, while gold futures in New York gained more than 6% to around $4,935.40. Silver showed even stronger recovery momentum, with spot prices rising over 9% to settle near $86.89 per ounce and silver futures jumping 12.5% to $86.57.
The Historic Collapse
The dramatic reversal began last Thursday when gold hit an all-time record high of $5,600 per ounce and silver traded at $120 per ounce. By Friday evening, gold had tumbled to $4,770, and the selling accelerated into Monday.
Over-the-counter spot gold quotes in London dropped as much as 10% from Friday's close to hit $4,404 per Troy ounce—a staggering 21.2% decline from Thursday's peak. London silver prices fared even worse, falling 13.7% to $71.67 per ounce and losing 41.1% from the previous week's all-time high above $121.
"Having observed this market for 40 years, this level of volatility is unprecedented," said Bruce Ikemizu, head of the Japan Bullion Market Association.
What Triggered the Sell-Off
Analysts and strategists pointed to several converging factors behind the historic rout. President Donald Trump's selection of Kevin Warsh as the successor to Federal Reserve Chair Jerome Powell emerged as a key catalyst, sending ripples through precious metals markets that had been riding a prolonged bull run.
The dollar index strengthened approximately 0.8% since Thursday, putting additional pressure on dollar-denominated commodities. Market observers also noted significant profit-taking after gold and silver's extraordinary gains in 2025, when gold surged about 65% and silver skyrocketed 145%.
The CME Group moved swiftly to contain volatility, raising margin requirements on COMEX gold futures to 8% from 6% and increasing margins on COMEX 5,000-ounce silver futures to 15% from 11%. The iShares silver ETF (SLV) recorded unprecedented trading volume exceeding $40 billion on Friday alone.
Impact Across Global Markets
The sell-off reverberated through Asian markets as well. Shanghai Gold Exchange prices fell 12.9% to ¥1,011 per gram, while SGE silver plunged 27.3% to ¥20,353 per gram.
Despite the sharp correction, both precious metals remain solidly higher for the year. Gold prices are up approximately 8-9% year-to-date, while silver maintains gains of around 16% since January 1.
Analysts See Opportunity
Major financial institutions remain bullish on precious metals despite the turbulence. Deutsche Bank noted that gold's thematic drivers remain positive, stating that investors' rationale for gold and precious metals allocations will not have changed fundamentally.
WisdomTree's Nitesh Shah characterized the dramatic sell-off as a "healthy correction" rather than a deeper pullback, projecting gold prices to reach $5,020 per ounce by year-end with silver trading around $88 per ounce.
JPMorgan analysts expressed even greater optimism, lifting their year-end target for gold to $6,300 per ounce—suggesting potential upside of nearly 30% from current levels.
What Investors Should Watch
Market participants will be closely monitoring Federal Reserve policy signals and any further developments regarding the Warsh nomination. The heightened margin requirements may continue to limit speculative positions in the near term, potentially dampening volatility.
For long-term investors, the pullback may present accumulation opportunities in precious metals that have demonstrated strong fundamentals over the past two years. However, the unprecedented volatility serves as a reminder of the risks inherent in commodities trading.
Sources: CNBC, BullionVault, Fortune, CBS News, Yahoo Finance, Euronews