A 1 kilogram gold bar and a 500 gram gold bar next to a 1 kilogram silver bar at The Vaults Group gold dealer in Barcelona, Spain, Monday, April 28, 2025.
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Gold and silver prices rebounded on Tuesday after suffering historic declines, with analysts suggesting the recent correction was more of a positioning reset than a sustained decline.
Gold prices fell on Monday and plunged nearly 10% on Friday before rebounding. This was the biggest one-day drop in decades. Silver also made a modest recovery after plummeting around 30%, its worst one-day performance since 1980.
Spot gold rose as much as 4% on Tuesday and was last trading more than 2% higher at $4,771.76 an ounce. Gold futures in New York were recently up 3%, hovering around $4,791.
Spot silver rose as much as 7.8% and was last trading 2.6% at $81.3 an ounce on Tuesday. Silver futures in New York rose 7% to $82.67 an ounce.
The rebound comes as investors reassess whether the selloff signals a structural tipping point or an exaggerated response to short-term factors.
Deutsche Bank strategists said history suggests this is a short-term catalyst, although the scale of the decline raises new questions about market positioning. The bank said that while signs of heightened speculative activity have increased in recent months, that alone is not enough to explain the scale of last week’s movements.
“The correction in precious metals prices has gone beyond its ostensible catalytic importance. Moreover, investor intentions for precious metals (public, institutional, private) have not changed, probably for the worse.”
Gold and silver prices rebound after plunge
The selloff was driven by a combination of factors, including a rebound in the U.S. dollar, changing expectations about the Fed’s leadership after President Donald Trump nominated Kevin Warsh to be the next Fed chairman, and position reductions ahead of the weekend.
Deutsche Bank said the broad investment case for gold and silver remains intact.
“Gold’s thematic factors remain positive and we believe investors’ rationale for gold (and valuables) allocations remains unchanged. Although the situation does not appear to be poised for a sustained reversal in gold prices, there are some contrasts between today’s situation and the background of gold weakness in the 1980s and 2013.”
Barclays echoed this sentiment, acknowledging the overheating technical market and poor positioning, but saying the broader gold “bid” remains resilient amidst themes of geopolitical and policy uncertainty and reserve diversification.
The situation for silver was even more dramatic, reflecting the small size of the silver market, high volatility, and high retail participation. However, some analysts remain bullish on the white metal.
“Speculative positioning has definitely had a short-term impact,” said Xavier Wong, market analyst at eToro. “Silver attracts more private participation than gold, which makes it much more sensitive to sentiment movements and short-term trading.”
However, Wong added that it may be “too simplistic” to attribute this entire move to speculation. There is real industrial demand for silver, particularly in areas related to data centers and AI infrastructure.
Research published in January predicts that global demand for silver will soar over the next decade, primarily due to solar power generation and a shift to more silver-intensive battery technologies. Total demand is projected to reach 48,000 to 54,000 tonnes per year by 2030, but supply is only expected to increase to around 34,000 tonnes, meeting only 62% to 70% of demand.
The solar power sector alone is estimated to consume between 10,000 and 14,000 tonnes per year, or up to 41% of global supply.
“That demand hasn’t gone away. What we’re seeing here is silver leading the way, which has always been the case in strong situations,” Wong said.
