Gold's Bull Run to Continue Despite Historic Price Correction, Analysts Predict
Despite experiencing one of the steepest price corrections in decades, gold's bull run remains intact, with analysts forecasting the precious metal to reach fresh record highs later this year. The dramatic pullback, which saw spot gold prices plunge nearly 10% on January 30, has not shaken the long-term bullish sentiment among market experts.
Historic Sell-Off Wipes Out Gains
Spot gold prices witnessed their sharpest single-day decline since 1983, breaking below the historic $5,000 per ounce milestone that had been achieved just days earlier. This significant correction erased much of the gains accumulated throughout the year. Silver experienced an even more dramatic fall, plummeting 27% in the same session, marking its biggest downfall on record.
Over the last two trading sessions, gold fell more than 13%, while silver dropped nearly 34%. However, market analysts largely view this correction as temporary rather than indicative of a trend reversal.
Analysts Maintain Bullish Outlook
"Although the fall was large and fast, it should also be remembered that we are currently at the same levels we saw just three weeks ago," noted Ross Norman, an independent analyst. "This is a significant correction but it does not, by any stretch of the imagination, signify the bull run has ended."
The retreat followed what analysts describe as an overextended rally that took gold from a record peak of $5,594.82 to around $4,700—a drop of nearly $900. The correction was triggered by two key developments:
- U.S. President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair
- CME Group's decision to raise margin requirements on precious metals futures
Market Dynamics and Future Projections
Analysts at WisdomTree observed that the pullback could discourage speculative buying, potentially creating opportunities for long-term strategic buyers to re-allocate their investments. Tai Wong, an independent metals trader, suggested that gold prices might experience a period of consolidation before resuming their upward trajectory over the coming weeks and months.
Market expectations of the Federal Reserve trimming interest rates twice this year are seen as a supportive factor for non-yielding gold. UBS analyst Giovanni Staunovo stated, "We look for gold to reach a new record high above $6,200/oz later this year."
Other major financial institutions have echoed this optimism:
- JP Morgan expects gold to reach $6,300/oz by year-end
- Deutsche Bank reiterated its gold price forecast of $6,000 for this year, citing sustained investor demand
Cautious Notes and Silver's Mixed Outlook
Despite the overall bullish sentiment, some analysts caution that volatility may persist in the near term. Fawad Razaqzada, market analyst at City Index and FOREX.com, warned, "It is far too early to suggest gold has found a bottom yet."
Expectations for silver remain mixed, reflecting its dual status as both a precious metal and an industrial commodity. The recent price movements highlight the different market dynamics affecting these two closely watched assets.
The consensus among analysts suggests that while the recent correction was significant, it represents a healthy market adjustment rather than the end of gold's upward trajectory. With supportive monetary policy expectations and continued investor interest, the precious metal appears poised for further gains in the months ahead.
