Mainstream Bullish on Gold and Silver Despite Sell-Off

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Are YOU worried that the big sell-off in gold and silver is the end of the bull market?

Bullion.Directory precious metals analysis 03 February, 2026
By Mike Maharrey
Journalist, analyst and author at Money Metals Exchange

I’m not, for reasons I have already articulated. And many mainstream analysts don’t seem to be concerned either.

Reuters recently published an article headlined, “Gold’s bull run seen intact despite steep pullback.”

“Despite a historic pullback in gold and silver prices, triggered by the sharpest two-session sell-off in decades, analysts see the metal’s ​bull run continuing and expect it to notch fresh record highs later this year.”

Keep in mind, this isn’t some gold bug website. This is Reuters making this argument.

During trading sessions on Friday (Jan. 30) and Monday, gold shed more than 13 percent, and silver plunged 34 percent. The drop in the spot gold price on Friday was the steepest single-day decline since 1983.

But as Ross Norman, an independent analyst interviewed by Reuters, noted, we’ve got to keep the selloff in perspective.  Despite a large and fast correction, gold and silver are still at the same level they were three weeks ago.

“This is a significant correction, but it does not, by ‍any stretch of the imagination, signify the bull run has ended.”

It’s important to remember that assets never go up in a straight line. Corrections, even steep ones, are normal and healthy in a bull market.

Gold and silver both got overextended as they rallied in January. Solid dynamics were driving the rally. These include de-dollarization, central bank gold buying, inflation pressures, Federal Reserve monetary easing, geopolitical tensions, and U.S. fiscal malfeasance. Nothing happened on Friday that indicates any of these things will reverse anytime soon.

However, speculators also got on the hype train, driving the price higher even faster. As one analyst put it, the metals were oversold, but still underinvested.

What’s so healthy about a correction?

As WisdomTree analysts pointed out, “the pullback could discourage speculative buying, potentially creating space for long-term strategic buyers to re-allocate.”

In other words, corrections clear out weak hands and create a stronger foundation for the next move up.

As Société Générale analysts explained, the sell-off wasn’t related to any change in market dynamics.

“These extreme moves tell you this was not fundamentally driven; it was about positioning.”

The note went on to explain that it wasn’t so much a “correction.” Metals prices “deleveraged.”

“When positioning gets stretched, stops get hit, margin calls rise, and systematic funds cut risk. Silver’s outsized drop is the hallmark of leverage being flushed. The move was exacerbated by profit-taking, VAR limits being hit, CTA deleveraging, and the fact this all happened at month-end. When one domino falls, prices accelerate faster than any fundamental feature could justify,”

Corrections generally have a catalyst. This one kicked off when President Trump chose the man perceived as the “most hawkish” candidate to head up the Federal Reserve when Jerome Powell’s term ends this spring.

The markets were counting on the new Fed chief to be more willing to cut interest rates aggressively. As a so-called “inflation hawk,” many think Keven Warsh won’t be quite so accommodating. A higher interest rate environment creates headwinds for gold and silver since they are non-yielding assets.

I go into detail about why the reaction to Warsh was knee-jerk and irrational HERE.

Even with Warsh heading up the Fed, analysts still expect two more rate cuts in 2026. Independent metals trader Tai Wong said this will help support the gold price.

Meanwhile, UBS analyst Giovanni Staunovo forecasts $6,200 gold this year. JP Morgan expects gold to reach $6,300 by the end of the year, and Deutsche Bank reiterated its gold price forecast of $6,000 this year, citing sustained investor ‍demand.

That’s not to say there won’t be more volatility and additional corrections. Many analysts expect a period of consolidation. City Index and FOREX.com analyst Fawad Razaqzada said, “It is far too early to suggest gold has found a bottom yet.”

However, on Tuesday (Feb. 3), gold was recovering, up over $269 in early trading and back close to $5,000. Silver was up over $8.50 and close to $89.

This article was originally published here

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