Trees don’t grow to the sky! This well‑known stock‑market adage now seems to apply to precious metals. After reaching stratospheric highs during Thursday’s session, gold (5,586 USD/ounce) and silver (121.8 USD/ounce) plunged sharply on Friday and again on Monday morning, to 4,400 USD and 71.2 USD respectively.
This can be seen as a classic bout of profit‑taking, after a spectacular start to the year tempting for both silver and gold prices (+45% and +19% in euros). Following gains of 176% and 98% over the previous two years, the acceleration seen in recent weeks had reached such a magnitude that precious metals were clearly overbought. Analysts’ forecasts pointed to gold and silver prices of around USD 5,490 and USD 117 respectively for the fourth quarter of 2026. It was therefore unlikely that prices could continue rising at such a pace without triggering caution among some market participants. What was missing was a trigger, and it appears that the appointment of the new Federal Reserve Chair, Kevin Warsh, lit the fuse. His nomination eased market fears that the Fed would be led by someone intent on continuing to cut policy rates drastically.
Does this correction mark the beginning of a deeper downturn? Probably not! It is more likely a healthy adjustment that helps to clear out recent excesses. It may take some time for the sudden spike in volatility to be fully absorbed by the market. But it will have the merit of laying more credible new foundations and allowing investors to reconnect with the fundamentals of the sector which remain encouraging.
"}},{"componentType":"sectionTitle","title":"What does this mean for the investment strategy?"},{"componentType":"paragraph","richBody":{"value":"ING’s fund managers indeed believe that the correction now offers buying opportunities, which some market participants have already begun to seize, as evidenced by the rebound in gold (+8%) and silver (+17%) from their recent lows.
Several factors continue to support precious metals. First, geopolitical instability remains high, as do trade uncertainties and concerns related to deteriorating public finances in many countries. The weakness of the dollar, which is prompting many central banks (especially in emerging markets) to increase the share of gold in their reserves, and the sharp decline in short-term rates in recent months are also important drivers. In addition, the expansion of infrastructure linked to artificial intelligence (data centers, etc.), alternative energies (solar panels, etc.), and electric vehicles, all require large amounts of precious and industrial metals.
All these elements should continue to support demand for precious metals. According to data from the World Gold Council, global demand for gold reached an all‑time record in the fourth quarter (1,303 tonnes), driven by massive purchases from gold‑focused exchange‑traded funds (175 tonnes) and physical demand (bars and coins) at its highest level in 12 years (420 tonnes). For the full year, demand exceeded 5,000 tonnes, something never seen before! This stands in stark contrast with the 3,670 tonnes of gold extracted from mines. A gap that helps explain why gold futures expiring at year‑end are hovering around USD 5,000/ounce. Silver futures are pointing to around USD 85/ounce.
In conclusion, precious metals have probably not said their last word! Even though their early‑year gains have shrunk from 30% to nearly 10%, they still deserve a place in a diversified portfolio due to their safe‑haven role and their low correlation with other financial assets.
"}}]},"hasMacro":false,"id":"19d8845e-224e-43a9-89e7-4468d9d9c9aa","localeString":"en-GB","mainHeaderZone":{"backLink":{"textLink":{"text":"News","url":"/en/individuals/news/economy-and-financial-markets"}},"componentType":"editorialHeader","coreHeader":{"body":"Precious metals, led by gold and silver, experienced a sharp air pocket over the past two sessions. The enthusiasm they had generated was so strong that they had become ‘overbought’. The correction, which can be considered healthy, does not, however, call into question the positive fundamentals behind their impressive rally!","headerImage":{"altTextDE":"\"\"","altTextEN":"\"\"","altTextFR":"\"\"","altTextNL":"\"\"","extension":"jpg","original":"https://assets.ing.com/m/53f5edc3500639e3/original/Golden-light-at-sunrise-on-the-iconic-arganzuela-footbridge-in-madrid-spain.jpg","transformBaseUrl":"https://assets.ing.com/transform/562dd56e-696a-40a2-8c0d-60667d14536d/Golden-light-at-sunrise-on-the-iconic-arganzuela-footbridge-in-madrid-spain","type":"image","width":5458},"title":"Precious metals under pressure"},"date":"2026-02-02","readingTime":5},"publishDate":"2026-02-03T09:21:56.654+01:00"}}