Gold Retreats After Historic Rally
Gold prices have pulled back sharply this week after reaching an all-time high of $5,589.38 per ounce in late February. As of March 5, 2026, the precious metal is trading around $5,116 per ounce, representing a significant correction from recent peaks but still maintaining extraordinary gains over the past year.
The retreat comes amid heightened volatility driven by ongoing geopolitical tensions in the Middle East. The conflict involving the United States, Israel, and Iran entered its sixth day on March 5, with reports of missile strikes targeting key locations in the region. Rising oil and gas prices have revived fears of persistent global inflation, which paradoxically tends to support gold prices as a hedge against rising costs.
A Year of Remarkable Gains
Despite the recent pullback, gold's performance over the past 12 months has been nothing short of remarkable. The metal has surged approximately 77% year-over-year, climbing from around $2,919 per ounce in March 2025 to current levels above $5,100. By January 2026, gold had surpassed $5,000 per ounce for the first time in history.
Fortune reports that gold's gains have exceeded 25% since the start of 2025, driven by ongoing inflation concerns and broader economic uncertainty. The metal historically averages 7.9% annual returns compared to stocks at 10.7%, but tends to outperform during economically unstable periods.
Silver Experiences Sharp Volatility
Silver has experienced even more dramatic swings, characteristic of its higher volatility compared to gold. The white metal recently pulled back from above $100 per ounce to around $85-94 per ounce, with futures tumbling more than 8% during one trading session to $81.23 per ounce.
James Cordier of OptionSpreakers.com notes that silver should "consolidate below $100 until new fundamentals present themselves." Experts emphasize that silver typically amplifies gold's movements in both directions, making pullbacks potentially steeper due to its thinner market structure.
Expert Outlook Remains Bullish
Despite near-term volatility, market analysts remain optimistic about precious metals' trajectory. Thomas Winmill, portfolio manager at Midas Funds, predicts gold will reach over $5,500 per ounce within the next month or two. Darius Dale of 42 Macro concurs, concluding that investors should "expect gold to grind higher."
Hiren Chandaria of Monetary Metals acknowledges potential "steep pullbacks in the near term" but anticipates any correction to be "relatively short-lived."
Several factors continue to support the bullish case for gold:
- Central bank reserve building as institutions diversify away from U.S. dollar holdings
- Expected Federal Reserve rate cuts making non-yielding assets more attractive
- Geopolitical risk premiums from ongoing Middle East tensions
- Concerns about asset seizures driving flight from dollar-denominated assets
Investment Considerations
Financial advisors generally recommend allocating no more than 5-10% of an investment portfolio to precious metals. Gold serves primarily as a store of value and inflation hedge rather than a growth-oriented investment.
For investors considering precious metals exposure, the current volatility presents both opportunities and risks. The long-term fundamentals supporting gold remain intact, but near-term price swings could be significant as markets digest geopolitical developments and Federal Reserve policy signals.
Sources: CBS News, Fortune, CNBC