Just experienced a collective surge! US stocks, gold, and silver are moving unexpectedly!

Precious metals prices continue to rebound!

On Monday morning Beijing time, gold and silver prices extended their upward trend. As of the time of this report from Cailian Press, spot gold rose 0.44% to $4,988.6 per ounce; spot silver increased over 2% to $79.69 per ounce. Last Friday, silver prices surged nearly 10%, and gold rose nearly 4%.

Additionally, U.S. stock index futures extended gains. As of this report from Cailian Press, S&P 500 futures were up 0.30%, Nasdaq futures up 0.38%, and Dow Jones futures up 0.26%.

Recently, the precious metals market has experienced a rare “rollercoaster” ride, with gold and silver soaring sharply, then plunging, only to rebound again. What will be the next move for gold and silver? Is this the end of the long-term trend, or just an exhilarating “stress test” in the middle of a bull market?

Institutions: Long-term bullish on gold prices, watch out for silver volatility

Silver’s price fluctuations have always been more intense than gold’s, due to its smaller market size and lower liquidity. In contrast, the more liquid gold market is better equipped to handle volatility.

Recently, several banks and asset management firms reaffirmed their long-term bullish outlook on gold. A Fidelity International fund manager who sold before the plunge said they are prepared to buy again; the head of the commodities team at PIMCO also believes the upward trend in gold remains intact.

Jason Hunter, an analyst at JPMorgan’s Global Market Strategy team, said that recent gold price movements are typical of a short-term rally followed by a reversal, a “midway rest” to digest the previous rapid gains, rather than the end of a long-term upward trend.

Technical charts show that after a parabolic rise, gold’s momentum has shown clear signs of exhaustion. Hunter predicts that gold prices will form a wide-ranging “holding pattern” over the next few weeks or even months. During this period, the $5,000 level and the $5100–$5150 zone will serve as significant resistance, limiting short-term rebounds.

Despite the short-term technical correction, the core logic supporting the gold bull market—the theme of “currency debasement”—remains solid. Hunter pointed out that the US dollar index (DXY) has been consistently below 100, which is a key long-term weakness signal. As long as the dollar stays below this level, the market remains vulnerable to the resumption of the downtrend that began in early 2025.

Galaxy Securities believes that this week, metal assets may continue to fluctuate within a range, with attention to US January CPI data to assess inflation persistence and adjust Federal Reserve policy expectations. In the medium to long term, the core logic of the precious metals bull market remains firm. Currently, the main driver for gold has shifted from short-term interest rate speculation to hedging against long-term US dollar credit risk and the global monetary system restructuring. Silver’s small market capacity and susceptibility to manipulation by capital require caution regarding leverage risks. Industrial metals will be more influenced by the global green transition, with a favorable long-term demand structure.

Zheshang Securities states that at this point, both gold and silver face potential liquidity shocks and risk preference shifts in the short term. However, in the medium to long term, the view that gold will outperform silver remains unchanged. In trading, a decline in volatility could be a key indicator for re-accumulation. If implied volatility of gold (Gold VIX) falls from high levels and stabilizes, it usually indicates easing liquidity shocks and more orderly market pricing, which would significantly improve gold’s risk-reward profile and make medium-term investment opportunities more attractive.

Volatility creates buying opportunities for gold?

Rick de los Reyes, fund manager and commodities chief at Praushe, said recent volatility in precious metals largely reflects consolidation after a rally, rather than the end of gold’s upward move. The final phase of the recent gold rally was quite rapid and featured a clear short squeeze, causing prices to spike sharply in a short period. Historically, after a short-term spike in volatility, markets tend to take time to digest profits and enter a sideways consolidation phase before potentially continuing higher. In this context, gold prices may stay within a range in the short term but still have the potential to reach new highs.

Reyes also noted that the earlier correction and subsequent rebound in gold provide important clues about overall market risk appetite. If the correction is related to speculation that Jerome Powell might be appointed Federal Reserve Chair, the market’s reaction shows investors still expect continued monetary easing. Any signals perceived as tightening could amplify market sensitivity and trigger significant volatility in risk assets.

He said that under a macro environment of “prolonged high interest rates,” gold’s hedging role is also undergoing a structural shift. Its traditional inverse relationship with real interest rates has weakened in recent years; instead, gold prices are increasingly correlated with rising sovereign debt, currency depreciation, and geopolitical uncertainties. Central bank demand for gold has become an important structural driver of prices, with significant recent growth, reflecting many countries actively diversifying their foreign exchange reserves. While excessive concentration in any asset can carry risks, the core factors supporting gold demand remain unchanged unless the global financial environment tightens significantly and persistently. Currently, there are no clear signs that major central banks are moving rapidly in that direction, making sustained long positions in gold less likely.

Tony Ciero, Vice President and Senior Portfolio Manager at Caldwell Securities, said that recent gold price corrections followed by rebounds came after Trump announced Kevin W. as the Fed Chair nominee. Clearly, W. has a hawkish stance, aiming to strengthen the dollar and oppose quantitative easing during the financial crisis. This hawkish attitude put pressure on investors, especially amid the dollar’s prior weakness and gold’s rally. Looking ahead, if rising interest rates strengthen the dollar, gold may have been overestimated. “I think these concerns have eased somewhat. Even at current levels, we remain optimistic about gold. The current rebound looks promising, and in the long run, we believe the dollar will weaken and gold will continue to rise,” Ciero said.

Ciero also pointed out that volatility can present excellent buying opportunities. If you believe that the fundamentals of an asset support its appreciation, then price corrections can be good entry points. “At least in our view, gold will continue to rise in the long term because the US intends to weaken its currency, which benefits gold.” Bitcoin, on the other hand, is different. Its volatility peaked at $125,000 last year and has since fallen to around $75,000. Bitcoin is more driven by geopolitical risks, and in risk-averse environments, the riskiest assets tend to be sold first. Ciero noted that geopolitical tensions—whether in Greenland or Venezuela—are putting downward pressure on Bitcoin.

However, Jim Wyckoff, senior analyst at Kitco Metals, believes that gold’s rebound lacks strong momentum, and without major geopolitical triggers, gold prices are unlikely to hit new records. As a traditional safe-haven asset, gold generally performs well during heightened geopolitical and economic uncertainty.

Wyckoff said, “The silver market currently shows a huge speculative bullish atmosphere.” He added that after years of a boom cycle, gold and silver now seem to be entering a typical commodity downturn phase.

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(Source: Securities Times)