Gold and silver prices have retreated from recent record levels, with analysts evaluating whether the correction presents a buying opportunity or signals consolidation after an exceptional rally. The pullback follows aggressive year-end profit-taking that triggered sharp declines from historic peaks reached last week.

Analyst Views on Recent Correction

Kelvin Wong, Senior Market Analyst at OANDA, attributed the recent pullback to technical unwinding after prices became stretched. He noted that the sharp rise over the past week left precious metals vulnerable to downside pressure as leveraged long positions were squeezed, pushing momentum indicators out of overbought territory.

Rahul Kalantri, VP Commodities at Mehta Equities, attributed the recent volatility to technical factors, including stretched long positions and higher margin requirements imposed by the CME, which triggered position reductions during thin holiday trading. He added that geopolitical tensions could provide underlying support to bullion prices at lower levels.

Market Performance and Recovery Signs

Domestic bullion markets showed mixed signals, with silver demonstrating stronger recovery momentum compared to gold. Silver futures had surged by Rs 8,599, or 3.83%, to Rs 2,33,028 per kg for the March 2026 contract on MCX, while gold futures opened at Rs 1,35,782 per 10 grams, up Rs 840, or 0.62%.

Investment Outlook and Metal Comparison

Ross Maxwell, Global Strategy Operations Lead at VT Markets, said gold remains better positioned as a core allocation heading into next year due to its stability and support from macroeconomic risks. He highlighted gold's role as a monetary hedge and ongoing interest from central banks, adding that silver offers higher upside potential but with significantly greater volatility due to its dependence on industrial demand.

While silver has outperformed gold by a wide margin, analysts caution that its higher sensitivity to economic growth makes it more prone to sharp corrections. Gold, by contrast, is expected to see steadier institutional demand if concerns around fiscal stability, currency credibility, or geopolitical risk persist.

Technical Levels and Trading Strategy

Market experts suggest caution and recommend avoiding fresh positions until markets stabilize. The correction was expected amid reduced participation and risk-off sentiment during year-end trading.

Long-term Perspective

Market experts broadly agree that the current decline does not undermine the longer-term outlook for precious metals. Instead, they view the correction as a potential opportunity for selective accumulation, particularly in gold, provided macroeconomic uncertainties and expectations of lower real interest rates remain intact. Geopolitical risks remain a key support factor, with safe-haven demand potentially returning due to ongoing global tensions.

UBS has significantly upgraded its gold price outlook, setting a new target of $5,000 per ounce for the first three quarters of 2026. The investment bank announced this revised forecast on Monday, representing a substantial increase from its earlier projection of $4,300 per ounce by end-2026.

Revised Price Targets

The bank's updated gold price projections reflect a more bullish stance on the precious metal's performance over the next few years.

Key Market Drivers

UBS expects gold demand to rise steadily through 2026, supported by several fundamental factors:

• Lower real yields, which typically make non-yielding assets like gold more attractive to investors
• Persistent global economic concerns, supporting safe-haven demand for the precious metal

Policy Uncertainty Impact

U.S. domestic policy uncertainty emerges as a significant factor in UBS's analysis. The bank specifically highlights concerns related to:

• Midterm elections
• Rising fiscal stress

These political and economic uncertainties are expected to drive investors toward gold as a hedge against market volatility.

Risk Scenario Assessment

UBS has also revised its upside price target for gold under stressed market conditions. In scenarios where political or financial risks increase substantially, the bank projects gold prices could climb to $5,400 per ounce, up from its previous crisis scenario target of $4,900 per ounce. This adjustment reflects the bank's assessment of heightened potential for market disruption and the corresponding flight-to-quality dynamics that typically benefit gold.