Gold and silver prices are entering a dangerous phase after a sharp rise

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Yaroslav Dmytrenko

30.01.2026

Gold and silver prices are entering a dangerous phase after a sharp rise — Precious metals are falling as the dollar recovers from multi-year lows

The rally in precious metals has entered what some analysts describe as a “dangerous phase.” On Thursday, gold dropped more than 7% to $5,100, while silver also corrected by around 8% from its recent highs.

The rapid surge in precious metal prices that has rattled Wall Street met resistance on Thursday as the U.S. Dollar Index (DXY) rebounded from its lowest level since early 2022.

“The continued rise in metal prices, especially gold and silver, is entering a dangerous phase in my view,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank, adding that “volatility is now feeding on itself: as price swings increase, liquidity declines.”

Gold prices have risen roughly 20% year-to-date as the dollar weakened against other major currencies. Just a week ago, Goldman Sachs analysts set a year-end gold price target of $5,400, citing upside risks driven by increased participation from retail investors.

XAU Hourly Chart. Source: TradingView

However, as early as Wednesday, gold broke above $5,500 after the Federal Reserve left interest rates unchanged, while comments from Fed Chair Jerome Powell did little to halt the dollar’s decline.

“I see this as a sign that conviction in shorting the dollar is high… and a weak dollar significantly amplifies downside trades,” wrote Robin Brooks, senior fellow at the Brookings Institution, on Thursday ahead of the gold sell-off.

What will stop precious metals?

Silver, for its part, surged above $120 per ounce before paring gains. Since the start of the year, silver prices have jumped 42% following an impressive rally in 2025. On Thursday, silver fell more than 8% to $110 before rebounding to $115.5.

“Silver prices have significantly exceeded our projected averages, although it is nearly impossible to identify a peak in markets exhibiting near-parabolic price growth,” JPMorgan analysts noted earlier this month.

The main drivers behind the temporary pullback in precious metals include profit-taking after record highs, portfolio rebalancing by investors, and shifts in market sentiment, partly due to rising oil prices.

“Gold’s pullback looks like a healthy correction after an extreme rally. If sentiment stabilizes and safe-haven demand returns, XAU could rebound later this week,” said analyst Anton Kharitonov.

Given external factors, the precious metals market is unlikely to calm down in the near term and is expected to become more volatile. However, both gold and silver remain far from being oversold and may be preparing to retest recent highs.

As we wrote, Why is gold up today?

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