Investment banks are doubling down on their investments in gold, but are cautioning against going all-in on silver as precious metals continue to seesaw after Friday’s historic selloff. At 2:11 a.m. ET Thursday, spot gold fell 0.7% to settle at $4,926.9 an ounce. This reversed a rebound from Tuesday and Wednesday trading, when the price of the yellow metal rose 6% and 2%, respectively. Silver also fell, with spot silver in New York falling 10% to $79.6 an ounce after rising 6% on Wednesday and 7.6% in Tuesday trading. After riding for a while, you will arrive. Metals generally fell sharply on Friday, with gold down 9%. It was the biggest single-day hit for silver futures since 1980, with silver falling by about 30%. The decline, which many investors attributed to the nomination of Kevin Warsh as the next Federal Reserve Chairman, continued this week, but both metals rose on Monday with heavy buying in tech and software stocks and money pouring into typically stable assets, including gold. xau= Concerns about the Federal Reserve’s independence from the White House then fueled the rally. Silver prices also rose due to the metal’s industrial uses and increased retail investor interest in the metal and related exchange-traded funds (ETFs). Read more Gold and silver extend rebound, but concerns about volatility remain We’ve been here before: Gold’s past bull market tells us where it could go next Is silver a meme trade? How the metal became ‘GameStop in 2026’ Gold remains in a bull market Many market watchers still see upside ahead for gold. UBS strategists said they view the decline as “normal volatility within a structural uptrend, rather than the end of a bull market.” In a note Monday evening, they said they determined the market remains “in the mid-to-late stages of a bull market, moving from a steady upward trajectory toward new highs, but currently experiencing intermittent drawdowns of 5-8%.” They noted that the factors that typically signal the end of a gold bull market have not yet materialized: “sustained real interest rates, a structurally strong US dollar, improved geopolitical stability, and restored central bank credibility.” UBS expects gold prices to reach $6,200 by next month and fall to $5,900 by the end of the year. Investment banks maintain long positions in the metal. “The recent spike in price volatility also creates an opportunity for income-seeking investors to monetize this environment,” the firm’s strategists said. In a note Tuesday, Goldman Sachs analysts also remained bullish despite the decline. “Our gold forecast of $5,400/toz by December 2026 remains subject to significant upside risk,” they said. Goldman’s forecast is supported by central banks continuing to build up gold storage and retail investors increasing their purchases of gold ETFs in response to the Fed’s interest rate cuts. Bank of America also remains bullish on gold, predicting it could reach $6,000 at least once in the coming months. In a note on Tuesday, the BofA team said it was bullish on gold, with gold trading below $2,000 an ounce in 2023, but cautioned that it was “somewhat concerned about the speed of recent price increases and the associated increased volatility.” “We are also closely monitoring several scenarios that could intensify headwinds to the yellow metal,” they added. They also noted that there is “uncertainty” about what President Donald Trump’s White House will do after the November midterm elections and “whether the administration will be able to continue to implement policy easily.” Silver Investors Urge Caution A separate UBS note over the weekend said that as silver prices decline, prices need to fall further “to make the metal attractive to us.” “In our view, going long an asset exhibiting 60-120% volatility requires an expected return of 30-60%, which is not yet the case,” they said. “Therefore, we need a lower price to make this metal attractive to us…We think investors need to carefully consider the return they need on an asset that has recently shown (very high) volatility.”Silver has had a great year in 2025, outperforming gold with an annual increase of 150%. However, the recent sell-off has sent metal prices down more than 30% from their all-time highs reached a few days ago. UBS expects spot silver to return to the $100 level by next month and then $85 by the end of the year. Silver is considered a safe-haven asset, but unlike gold, it is an important component of consumer goods such as computers, solar panels, medical equipment, and cars. The UBS team said this complicates the situation, as rising silver prices reduce industrial demand for the metal. “With more than 50% of demand related to industrial applications, we believe that current prices…will likely lead to a decline in industrial demand over time as end users seek to optimize their silver usage and reduce input costs,” they said. Similarly, Goldman Sachs analysts Lina Thomas and Daan Struiven were more cautious on silver than gold due to supply constraints in the key London market. “The continued liquidity squeeze in London adds an additional layer of extreme price action on top of the same call structure volatility seen in gold,” they said, adding: “We continue to advise volatility-averse clients to remain cautious.” BofA strategists were somewhat upbeat on the outlook for silver, but also cited potential headwinds, such as lower solar panel consumption. “More specifically for silver, the price has deviated from ‘fair value’ and our estimate is around $60-$70 an ounce, so we are not at all surprised by this correction,” they said. “Nonetheless, deficits are still expected, which should ultimately favor metals.”
