By Ross Norman
Updated February 2026
The current year has proven exceptional for gold by any metric. Following its all-time high of $5,600 as recently as late January, the market exhibited clear signs of technical overextension and elevated speculative positioning, setting the stage for a material correction. Gold subsequently declined by approximately 20%, a move exacerbated by stop-loss liquidation, before establishing a floor near $4,500. Historically, such corrections are often followed by a 50% retracement, validating the ongoing bull market that began in 2022. While gold has indeed recovered, upward momentum has moderated greatly, leaving prices currently only just above the $5,050 target implied by this framework.
The tempered recovery can be largely attributed to headwinds from renewed U.S. dollar strength following the stronger-than-expected U.S. employment data, which prompted a reassessment of rate-cut expectations, now deferred until midyear. Concurrently, U.S. Treasury yields firmed, with the benchmark 10-year rising nearly three basis points to 4.168%.
On the physical side, domestic Indian gold demand remains robust, with local market premiums hovering near decade highs despite record prices. This resilience - contrary to historical price sensitivity - serves as a key leading indicator supporting a constructive long-term market view. In contrast, Chinese seasonal demand has moderated, with local prices transitioning from a nine-month premium to a modest discount. Overall, Asian offtake continues to represent an important barometer for global sentiment and consumption trends.
In comparison, silver experienced significantly greater volatility, declining from an all-time high of $122 to a low near $65, amounting to a 47% correction - more than double gold's fall. If gold experienced some upside fade, then so it was for silver, and much more so. The market is targeting a 50% recovery at $94, but likely, short-term confidence has been damaged by both the scale and speed of the recent sharp decline. Excessive speculative positioning coupled with large Chinese derivatives plays prompted futures exchanges around the world to increase trading margins to reduce speculative exuberance, and likely this, coupled with a desire for profit-taking, contributed to the price reversal.
Silver’s underlying fundamentals do however remain favourable, with the market recording five consecutive annual supply deficits with structural demand drivers - including advances in solid-state silver battery technology, sustained photovoltaic consumption, and potential U.S. strategic stockpiling following its inclusion on the USGS critical minerals list - continuing to underpin a strong longer-term outlook.
Platinum exhibited comparable volatility, declining from nearly $3,000 to below $2,000 before recovering to approximately $2,100. The correction was compounded by widespread liquidation and increased margin requirements across futures exchanges, triggering leveraged unwinds and broad-based profit-taking. Nonetheless, prices remain more than double year-on-year, supported by chronic supply constraints in South Africa and enduring industrial demand amid slower EV adoption.
Similarly, palladium declined by approximately 28% from its peak before rebounding 11.6%, supported by ongoing demand from catalytic converter applications and constrained Russian and South African supply. Both metals appear to be consolidating within broader bullish trends, underpinned by persistent supply challenges and evolving automotive demand dynamics, notably following Europe’s partial rollback of internal combustion engine restrictions. With speculative positions now largely neutralised, market conditions appear conducive to stabilisation and a gradual price recovery.
