Editorโs note: eToro is weighing in on the recent pullback in gold and silver prices after a strong rally, framing the move as a period of consolidation rather than a shift in the broader outlook. According to the firm, profit-taking, crowded short-term positioning, a firmer US dollar, and rotation back into equities have driven near-term weakness. At the same time, longer-term support remains in place, underpinned by macro uncertainty, geopolitical risk, and sustained demand for precious metals. The commentary also highlights silverโs higher volatility and the role of industrial demand, including from data centres and AI-related infrastructure.
Key points
- Recent declines in gold and silver are attributed mainly to profit-taking and positioning unwinds after sharp rallies.
- Retail participation and short-term sentiment have amplified price swings, increasing near-term volatility.
- A stronger US dollar and rotation into equities have added pressure on precious metal prices.
- Gold has already shown signs of rebounding, returning above the USD 5,000 per ounce level.
- Silver remains more volatile but continues to benefit from industrial and technology-related demand.
Why this matters
Precious metals continue to play a strategic role for investors navigating an uncertain macro environment. For market participants, the eToro view reinforces the idea that short-term price corrections do not necessarily undermine the longer-term case for gold and silver as portfolio diversifiers. With geopolitical tensions, shifting policy expectations, and growing demand from technology and AI infrastructure, these assets remain relevant not just as trades, but as risk management tools within diversified investment strategies.
What to watch next
- How gold and silver prices behave during the current consolidation phase.
- Changes in US dollar strength and equity market rotation.
- Signals on inflation, policy expectations, and geopolitical developments.
- Trends in industrial demand, particularly linked to data centres and AI infrastructure.
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Abu Dhabi, United Arab Emirates โ February 04, 2026: Gold and silver prices have cooled in recent days following a strong rally, a move that reflects stretched positioning rather than a deterioration in the broader outlook, according to eToro.
โAfter sharp rallies, periods of profit-taking and consolidation are normal, particularly when retail participation increases and short-term sentiment becomes crowded,โ said Zavier Wong, Market Analyst at eToro. โRetail flows tend to amplify moves in both directions, which can exaggerate pullbacks even when longer-term drivers remain intact.โ
The recent weakness appears largely driven by profit-taking and positioning unwinds. A firmer US dollar and rotation back into equities have also weighed on prices, as investors reassess near-term inflation risks, US policy signals, and ongoing geopolitical uncertainty.
Looking ahead, prices may remain volatile in the near term as markets reset, especially with gold appearing technically overbought after its rapid rise. However, Wong noted that pullbacks do not automatically invalidate the broader case for holding exposure. โWe are already seeing prices rally again, with gold topping USD 5,000 per ounce once more. Persistent geopolitical tensions and macro uncertainty continue to support demand for precious metals, which are increasingly viewed as portfolio insurance rather than short-term trades.โ
Silver has followed a similar path, though with greater volatility. Its recent sharp declines are consistent with silver’s historical tendency to magnify gold’s direction during strong phases. While speculative positioning has contributed to near-term moves, fundamentals remain supportive, with ongoing industrial demand, including from data centres and AI-related infrastructure.
โFrom here, the market is likely to see periods of consolidation rather than a one-way move,โ Wong added. โFor investors, the focus should be less on timing the exact bottom and more on how precious metals fit within a diversified portfolio, particularly while uncertainty remains elevated.โ
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