The gold price is currently experiencing an unusual roller coaster ride: the largest daily gain in history was followed almost immediately by the strongest daily loss, which is now followed by initial attempts at stabilization. Such movements are more familiar from risky asset classes – and that is exactly what has noticeably unsettled the markets. According to Metals Focus, the recent turbulence is not a signal for the end of the upward trend. The British research firm warns against interpreting the correction in the wake of the record-breaking rally as a structural break.
The experts at Metals Focus describe the development as understandable: given the pace at which the gold price had previously risen, a countermovement was practically inevitable. The market had to “let off steam.” In the first weeks of 2026, according to Piggott, gold marked a double-digit number of new all-time highs in less than three weeks – silver temporarily increased by up to 200% year-on-year. With such steep movements, a sharp setback is not only likely, but also functional from a market perspective, as it reduces overheating.
Gold Price and Silver Price: Extreme Fluctuations After Broken Marks
The extent of the correction can be seen in the price chart described by Metals Focus: The gold price could not hold an initial support at $5,000 per ounce. Overnight, additional selling pressure set in, pushing the price down to $4,402. From this low, however, there was a strong counter-reaction. The spot price was last at $4,747.90 per ounce – still almost 3% in the red on the day, but significantly above the overnight low, before it went back above the $4,800 mark on Tuesday.
The movement was similar for the silver price, albeit with different figures: silver fell to $71.31 per ounce overnight and then traded again close to the starting level at $82.01 per ounce – now around $83 USD per ounce. For the analysts, the exact daily change is less important than the pattern: high leverage positions, strong options activity and rapid position adjustments can create short-term “events” in thin liquidity that exaggerate prices in both directions.
Nevertheless, Metals Focus does not expect this volatility to fundamentally damage gold’s role as a store of value. They point out that the motives of many buyers today are different than in phases in which gold was primarily played for rapid price gains. Many market participants would rather buy gold as a hedge – for example, against currency devaluation, geopolitical risks or as a stability component in the portfolio. Short-term fluctuations do little to change these motives.
At the same time, Metals Focus warns of a side effect: especially spectacular movements would attract “tourist capital” – i.e. speculative money that relies on momentum in the short term and can additionally amplify the fluctuations at highs as well as at lows. According to the experts, however, the extent of this share will only be assessed when the data on ETFs and options markets are fully available.
Physical Demand Supports: Metals Focus Sees Buyers in the Setback
In addition to the futures market, Metals Focus emphasizes the importance of physical demand. Despite the hectic price movements in futures trading, fundamental demand remains robust. As an example, the research firm cites India, where physical silver demand remains solid. During the setback on Friday, premiums rose significantly – an indication that demand for physical material tends to increase rather than disappear in a phase of weakness.
Metals Focus also expects gold and silver to benefit from a psychological effect: FOMO, i.e. the fear of missing a movement. Many buyers saw hardly any entry opportunities last year because there was practically no significant setback. “Now there is one – and that is exactly when physical buyers appear on the scene,” is the argument. From this perspective, a correction can activate demand instead of destroying it.
Metals Focus also classifies the recent strong selling pressure as a result of high speculative activity: extensive options positions and speculative interest have favored a liquidity event. At the same time, according to Piggott, gold remains fundamentally supported – not least by central banks, which are also seen as steady buyers in 2026.
Central Banks and Portfolio Quotas: Drivers Remain Active According to Metals Focus
For official demand, Metals Focus mentions concrete orders of magnitude: Although the pace could slow down somewhat compared to 2025 – a level of around 850 tons is mentioned there – the research firm still expects 700 to 800 tons of purchases by the official sector this year. From the analysts’ point of view, this would still be significantly above the level of the time before the pandemic and would structurally support the gold market.
Another point in the analysts’ argumentation is the portfolio quotas. Despite the rally, the gold allocation in many portfolios is surprisingly low. On average, it is still in the low single-digit percentage range. However, even a shift from 3% to 4% could trigger a noticeable demand impulse, according to Metals Focus. In addition, long-term investors – such as pension funds, foundations or family offices – have so far been underrepresented in the market. Should the participation of these groups become more widespread, this could broaden the demand base.
“Volatility is unpleasant, but in this environment it is less a warning signal than an accompanying phenomenon of a reassessment of risks.“
Metals Focus is therefore sticking to its fundamental forecast even after the correction. The firm expects an average gold price of $5,500 per ounce by mid-year and approximately $5,800 per ounce on average for the year. At the same time, Metals Focus is dampening very high scenarios set by other players: Structural drivers such as debt, fiscal imbalances, de-dollarization and geopolitical risks are changing slowly – not overnight.
Overall, Metals Focus sees the recent setback more as a stress test that does not weaken the market, but rather orders it. A correction sets back the mood, brings buyers back into the market and can thus create a more stable base. Volatility is unpleasant, according to Metals Focus – but in this environment it is less a warning signal than an accompanying phenomenon of a reassessment of risks.
