Gold Prices Plunge, Will They Rise or Fall Next?
Gold and silver prices have experienced significant declines after reaching all-time highs (ATHs). Gold, which previously traded around $4,550 per ounce, has now fallen to around $4,358, while silver, which had reached $84 per ounce, has plummeted to around $47.3. This decline surprised the market, given that both precious metals have shown exceptional performance throughout the year.
One of the main causes of this sharp correction is profit-taking following a very strong rally. Investors who have enjoyed significant profits from rising gold and silver prices are now taking some of their profits, increasing selling pressure. Global economic uncertainty is also making market participants more cautious.
Technical indicators indicating prices have risen too quickly are driving the correction. When the market is deemed "overbought," many traders opt out, which then accelerates the price decline. This situation is exacerbated by thin market liquidity towards the end of the year, leading to sharper price fluctuations.
Despite the sharp correction, gold and silver remain on track to record their best annual performance in decades. The previous price surge was largely driven by global monetary policy—including interest rate cuts by the US Federal Reserve—which made non-yielding commodities like gold increasingly attractive.
Demand for precious metals was also supported by large purchases by central banks and inflows into exchange-traded funds (ETFs). This suggests that institutional investors still view gold and silver as safe-haven assets, especially amid geopolitical uncertainty and inflation concerns.
However, this sharp decline is a reminder that commodity markets remain volatile. Precious metal prices are heavily influenced by economic data, monetary policy, and geopolitical tensions, which can change rapidly. Investors are advised to look not only at short-term trends but also at broader fundamental factors.
Early January 2026 Prediction: Global analysts predict that gold and silver prices could rebound in early January 2026 after the market digests early-year economic data and monetary policy minutes. "We see the potential for a gold rebound towards the $4,400-$4,600 range early in the year, provided US inflation data remains moderate and interest rates remain stable," said a senior commodity analyst. Another prediction suggests that silver could reach $55-$60 again if industrial demand and investment interest remain strong, although volatility is still expected to be high in early 2026.
According to Goldman Sachs, one of the world's largest investment banks, gold is expected to rebound strongly throughout 2026 despite the recent sharp price correction. Goldman projects that gold prices could reach around $4,900 per ounce by December 2026—around a 14% increase from current levels in its base case, driven by persistently strong central bank demand and support from expectations of a US Federal Reserve interest rate cut. (asd)
Source: Newsmaker.id
