Category: Forex News, News
Gold, Silver And Platinum Prices Are Plunging. Here’s Why.
Topline
The value of gold dropped more than 5% on Tuesday, pacing what would be the largest single-day decline for the metal in more than a decade, leading a broader metal sell-off as investors appear to step back from a record-breaking buying frenzy.
Silver and platinum have joined gold with record-breaking rallies in recent months as investors seek out safer assets. getty
Key Facts
Gold futures dropped 5.2% by Tuesday afternoon to around $4,130, paring back earlier losses after falling as much as 6.3%, marking the largest intraday drop for the metal since a 6.3% plunge in June 2013.
Futures for silver and platinum, which have risen 60% and 66% this year, respectively, outpacing gold (54%), have fallen 6.7% and 7.2%, respectively.
A sell-off for the metals is not unexpected as they have each surged this year, with investors now pulling back after earlier relying on them as safer assets, according to Standard Chartered analyst Suki Cooper, who said the market is experiencing a “technical correction” as the “universe of investors has expanded rapidly.”
Bart Melek, TD Securities’ global head of commodity strategy, told Bloomberg that precious metal dealers are “taking profits after a very robust rally,” noting recent rallies were historically unsustainable.
Gold prices also tend to fall as the U.S. dollar strengthens, making bullion expensive for investors overseas—the dollar index has risen 0.4% on Tuesday.
How Far Will Gold Prices Rise This Year?
Bank of America analysts raised their price forecast for gold earlier this month, becoming the first major bank to give gold a $5,000 per ounce price target for 2026. HSBC, noting it remains bullish on the metal, gave a more conservative outlook last week after raising its average 2025 price target for gold to $3,950 from $3,125. Economists were previously bearish on gold’s value: JPMorgan in February set a $2,950 price target for the end of the year, while Citigroup and Goldman Sachs set $3,000 targets for year’s end and by the middle of 2026, respectively.
How Far Will Silver Prices Rise This Year?
Bank of America similarly raised its price target for silver, lifting its outlook for the metal to $65 an ounce (it was trading at just under $48 on Tuesday afternoon). Analysts warned of possible risks for silver, however, indicating prices may become volatile as liquidity grows and demand falls, despite the metal remaining favored among investors. Goldman Sachs wrote last week it’s likely silver prices will continue to rise during a government shutdown and expectations of an interest rate cut from the Federal Reserve, which has signaled officials were divided over whether to lower rates two more times this year.
Key Background
Metals have surged so far this year during periods of “elevated” economic and policy uncertainty, headlined by President Donald Trump’s widespread tariffs and growing inflation, according to Goldman Sachs analyst Lina Thompson. Hedge fund billionaire Ray Dalio has previously called on new investors to jump on gold and other precious metals while other assets, like equites, perform poorly during these periods, claiming metal is “the one asset that does very well.” Silver has climbed because inventory in the metal’s global trading hub, London, has disappeared this year, according to Greenland Investment Management’s Anant Jania, who told Bloomberg there is “no liquidity available currently.” Silver and gold are often tied together and are favored as safe-haven assets, but Goldman Sachs analysts said they expect “more volatility and downside risk” for silver than for gold, which is backed by demand from central banks. Platinum, while also viewed as a safer investment, has risen in value because of strong demand from jewelers and automakers, analysts said.
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