Global: Gold and silver markets have surged to historic levels this week, with gold briefly surpassing $4,000 an ounce and silver topping $50 an ounce, marking the eighth consecutive week of gains for both metals. Analysts, however, are urging caution, citing technical overbought conditions and potential short-term corrections.
Precious metals rally continues
Spot gold last traded at $3,980.70 an ounce, up over 2% from the previous Friday, while silver hovered around $49.99 an ounce, gaining 4% over the week. Year-to-date, gold prices have surged 51%, while silver has risen a remarkable 71%, fueled by strong industrial demand and growing investor interest.
The rally has been partly driven by geopolitical tensions and persistent concerns over global debt. While easing tensions in the Middle East, including a potential Israel-Hamas peace agreement, may temporarily curb gold’s safe-haven appeal, analysts remain optimistic about the long-term bullish fundamentals.
Analysts urge caution
Some market strategists warn of technical exhaustion at these record levels. Lukman Otunuga, Senior Market Analyst at FXTM, noted that short-term corrections could occur if gold breaks below $3,950, while a clean breakout above $4,000 could push prices toward $4,050.
Michele Schneider, Chief Market Strategist at MarketGauge, said she has exited her positions due to high FOMO (fear of missing out) sentiment, advising investors to take profits and wait for a consolidation before re-entering the market.
“The surge in gold-backed ETFs, with record inflows of nearly $26 billion in Q3, has pushed holdings close to the 2020 highs,” Schneider said. “A correction and consolidation may be necessary before the next breakout.”
Institutional and retail demand drives momentum
Christopher Vecchio, Head of Futures Strategies at Tastylive.com, emphasised that gold and silver are still in the early stages of a long-term bull cycle. Paul Williams, Managing Director at Solomon Global, added that retail and institutional investors alike are increasingly seeking stability amid fiscal pressures, rising debt, and uncertainty in fiat currencies.
“$4,000 is a key psychological level; the market may oscillate between $3,900 and $4,100,” Williams said. “Fundamental drivers such as central bank accumulation and geopolitical uncertainty remain strong, supporting further potential gains.”
Looking ahead
Markets will closely watch upcoming economic data from the New York Federal Reserve and the Philadelphia Federal Reserve, along with developments from the International Monetary Fund and World Bank annual meetings in Washington. Analysts expect these events could influence short-term price movements but are unlikely to derail the broader bullish trend.