Gold and Silver Prices Snap Rising Streak with Sharp Decline
Gold and silver prices experienced a significant downturn on Tuesday, February 10, breaking a two-day upward trend as profit-booking took hold in a volatile market. Spot gold fell by 0.70% to $5,040 per ounce, while spot silver plunged 1.94% to $80.33 per ounce during Asian trading hours. This correction comes after a remarkable rally, with gold prices now down over 11.27% from their record high of $5,608.25 on January 29, and silver prices having dropped approximately 50% from their all-time peak of $121.64.
Drivers Behind the Precious Metals Slump
The recent decline in both gold and silver is attributed to speculative activity cooling off after pushing markets into overheated territory. However, underlying factors that have supported the multiyear uptrend remain robust. According to a Bloomberg report, rising geopolitical tensions, strong central-bank purchases, and investors moving away from sovereign bonds and currencies continue to provide a solid foundation for precious metals.
Several financial institutions, including Deutsche Bank AG and Goldman Sachs Group Inc., anticipate a rebound in bullion prices due to these enduring demand drivers. Notably, China's central bank extended its gold-buying streak to a fifteenth consecutive month in January, highlighting sustained official-sector interest.
Economic Indicators and Federal Reserve Policy Outlook
Upcoming economic data later this week is expected to shed light on the Federal Reserve's policy direction, following President Donald Trump's nomination of Kevin Warsh as the next Fed chair. The January employment report, due on Wednesday, is projected to indicate a stabilizing labor market, while inflation figures will be released on Friday.
Rochan Pattnayak, Chief Investment Officer at Choice AMC Limited, explained, "The correction has largely been driven by profit-taking and shifting macro expectations, including a perceived pause in the US Federal Reserve's easing cycle. The Federal Reserve is widely expected to hold rates steady after three consecutive cuts since September 2025. This shift in policy expectations contributed to gold prices retreating by approximately 2–8% from recent highs before rebounding modestly over the past week. Importantly, this correction does not undermine gold's longer-term strategic relevance. The broader macro environment remains supportive, with limited supply growth, continued geopolitical uncertainty, and central bank demand expected to remain solid at levels close to those seen in 2025."
Investment Strategies for Gold and Silver
Pattnayak further advised investors to adopt a disciplined allocation approach rather than reacting tactically to short-term volatility. "A calibrated exposure (for example, 10–15% of a diversified portfolio, depending on risk profile) can help strengthen resilience without resorting to concentrated bets during short-term volatility," he recommended.
Ponmudi R, CEO of Enrich Money, echoed this sentiment, stating that the broader uptrend in gold prices remains intact, with the current pullback reflecting healthy profit booking and price digestion. On the technical outlook, Ponmudi noted that COMEX Gold is trading near the $4,900–$5,100 zone after correcting sharply from recent highs above $5,500–$5,600. "Prices are trading above key moving averages, indicating the correction is maturing and could set the stage for renewed upside momentum. Strong buying interest is evident in the $4,500–$4,700 support band, and sustained stability above this area could pave the way for renewed upside, with a breakout above $5,200–$5,300 opening the path toward prior record highs," he added.
Silver Price Outlook and Market Dynamics
Regarding silver, Ponmudi observed that while the broader bullish structure persists on higher timeframes, the steep pullback has pushed prices below key moving averages, signaling short-term bearish pressure and an extended corrective phase. COMEX Silver is currently trading near the $78–$83 zone after a sharp correction from record highs above $121. "Strong buying interest is visible in the $65–$70 support band, aligned with prior swing lows and long-term trend support. A sustained hold above this base, followed by a recovery and close above $85–$92, could revive upside momentum toward $95–$105 and potentially retest previous highs, while the medium- to long-term outlook stays constructive on steady industrial demand and structural supply constraints despite elevated volatility," he explained.
Disclaimer: This article is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking companies and not of Bharat Horizon. Investors are advised to consult certified experts before making any investment decisions.
