One kilogram and five hundred grams of gold bullion next to one kilogram of silver bullion at The Vaults Group gold dealers held on Monday, April 28, 2025 in Barcelona, Spain.
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Gold and silver prices rebounded on Tuesday after a historic sell-off, with analysts suggesting that the recent correction was more of a repositioning than a sustained decline.
Gold prices fell on Monday and fell nearly 10% on Friday, their biggest one-day decline in decades. Silver made a modest recovery after falling nearly 30%, marking its worst one-day performance since 1980.
Spot gold It rose 4% on Tuesday and was last up more than 2% at $4,771.76 an ounce. Gold futures In New York, it was last up 3% to about $4,791.
Spot silver It rose as much as 7.8% and was last up 2.6% on Tuesday at $81.3 an ounce. Silver futures In New York, it rose 7% to $82.67 an ounce.
The rebound came as investors reassessed whether the direction represented a structural reversal or an overreaction to short-term catalysts.
Strategists at Deutsche Bank say the story is short-term catalysts, even as the sell-off raises fresh questions about market positioning. The bank said that while signs of increased speculative activity had been building for months, they were not enough to explain the scale of last week’s movement.
“The correction in precious metals prices has outweighed the importance of its apparent catalysts. Moreover, the sentiment of precious (official, institutional, private) investors may not change for the worse.”
Gold and silver prices rose after heavy selling
The sell-off was driven by a combination of factors including a stronger U.S. dollar, a shift in expectations for Federal Reserve leadership following President Donald Trump’s nomination of Kevin Warsh to be the next Fed chairman, and shorting ahead of the weekend.
Deutsche Bank said the broader investment climate for gold and silver remained unchanged.
“Gold’s thematic drivers remain positive and we believe investors will not change their rationale for gold (and precious) allocations. Gold prices are not set for a sustained move, and we draw some contrasts between today’s situation and the context of gold’s weakness in the 1980s and 2013.”
Barclays took a similar tone, acknowledging overheated technicals and a stretched position, but said the broader “bid” for gold was likely to remain stable amid geopolitical and political uncertainties and reserve diversification themes.
Silver was dramatic, reflecting its small market, high volatility and heavy retail presence. However, some analysts still maintain a bullish stance on the white metal.
“Speculative positioning definitely played a role in the short term. Silver attracted more retail participation than gold, making it more susceptible to fast-moving sentiment and short-term trading,” said Xavier Wong, market analyst at eToro.
However, Wong added that it may be “too simplistic” to attribute the move to speculation. There is real industrial demand for silver, especially in areas related to data centers and AI infrastructure.
A study published in January It predicts that global demand for silver will grow over the decade, driven mainly by the shift to solar photovoltaics and silver-intensive cellular technologies. Total demand is projected to reach 48,000 to 54,000 tonnes per year by 2030, while supply is expected to increase to around 34,000 tonnes, meaning only 62-70% of demand will be met.
The solar sector alone consumes 10,000-14,000 tonnes annually, or 41% of the global supply.
“This demand has not disappeared. What we’re seeing here is silver getting ahead of itself, which is what it’s always done during its strong periods,” Wong said.