Gold prices saw a notable decline to approximately $5,300 per ounce after reaching a high of $5,600 on Thursday, while silver also lost ground following an impressive rally in recent weeks. This pullback in precious metals coincided with a sell-off in the stock market, particularly led by the tech sector, as the Nasdaq Composite experienced a decline of up to 2%. The drop was largely attributed to disappointing quarterly earnings from Microsoft, which reported higher-than-expected capital spending and a slowdown in cloud sales growth, prompting investors to rethink their positions.
The rapid ascent of precious metals had initially caught Wall Street off guard, but the market faced challenges as the U.S. dollar rebounded from its lowest levels since early 2022. Ole Hansen, head of commodity strategy at Saxo Bank, expressed concerns over the latest developments. “The continued surge across metals, especially gold and silver, is entering a dangerous phase in my opinion,” he stated, highlighting the potential for increased volatility as price fluctuations become more pronounced.
Year-to-date, gold has surged approximately 20%, an increase fueled by a weakening dollar against other currencies. Last week, Goldman Sachs provided a year-end price target of $5,400 for gold, suggesting potential upside risks related to higher participation from private-sector investors. The precious metal crossed the $5,500 mark on Wednesday after the Federal Reserve opted to hold interest rates steady, with comments from Fed Chair Jerome Powell failing to halt the dollar’s decline.
Robin Brooks, a senior fellow at the Brookings Institution, noted the growing conviction in a dollar-down trade, stating that “the weak Dollar is super-charging the debasement trade.” Meanwhile, silver prices peaked at over $120 per ounce before scaling back, marking an impressive 42% increase for the year following a remarkable rally in 2025. Analysts from JPMorgan acknowledged the steep rise in silver prices, indicating that they had significantly overshot previously forecasted averages. However, they cautioned against declaring an imminent top in the market, which is currently characterized by nearly parabolic price momentum.
