Gold & Silver Extremely Volatile as Bullish Gold Calls Continue

Well, it's been a truly wild week for gold and silver, with the white metal taking a round trip from $100 to $120 and then all the way back down to $100 again and then even lower as I’m talking here now – down to under $90. Gold busted through $5,000, ran to almost $5,600 and then right back down to below $5,000 where it is now.

We'll get into what all these prices means later in the program, but it's no understatement to say we are seeing truly extraordinary volatility -- and public interest -- in the gold and silver markets these days.

It was only back in October when Bank of America raised its 2026 gold price forecast to $5,000.  Now that the yellow metal has promptly hit that goal, the big bank has upped its projection again -- and is now calling for $6,000 gold this year.

BofA analyst Michael Hartnett said gold’s performance in past bull markets influenced his thinking, pointing out that past bull markets will typically have at least 300% moves.

Another BofA analyst noted that bull markets don’t end simply because prices reach high levels -- the market may feel overbought technically, but it's actually majorly underinvested. The bulls will fade when the fundamentals driving the market shift. At this point, there is no reason to think that de-dollarization, central bank gold buying, inflation pressures, Federal Reserve monetary easing, geopolitical tensions, and U.S. fiscal malfeasance will end any time soon.

Tight supplies have been a key driver of the silver market as we've reported here at Money Metals often. Widmer said he thinks supply constraints may also impact the gold market, forecasting that the 13 major North American gold miners will produce 19.2 million ounces this year, a decline of 2 percent from 2025. He said he believes that most market forecasts for output are too optimistic.

Widmer also projects average all-in sustaining costs to produce an ounce of gold will rise 3 percent to about $1,600, a level above the market consensus.

There has been growing interest in gold as a portfolio diversifier. Last fall, Morgan Stanley CIO Michael Wilson said investors should consider abandoning the traditional 60/40 equity/bond portfolio allocation and adopt a 60/20/20 distribution with 20 percent allocated to precious metals.

Yet on average, Western investors currently hold less than 1 percent of gold in their portfolios.

With the price rallying through $5,000 during the past week, it’s getting increasingly more difficult to ignore gold. Widmer said this will likely incentivize more portfolio managers to consider both gold and silver.

Meanwhile, the World Gold Council just reported that global gold demand topped 5,000 tonnes for the first time ever in 2025.

Investment buying manifested in strong demand for both ETFs and physical metal. Investors were attracted by the rising price, and the subsequent inflows helped to generate further price gains.

Meanwhile, gold coin and bar demand hit a 12-year high of 1,374 tonnes. In value terms, that was a record-breaking $154 billion.

More than half of the global coin and bar demand came from two countries – China and India.

According to the World Gold Council, “The rise in the gold price was overwhelmingly the most important factor driving stronger demand.”

However, bar and coin demand in the U.S. did not grow in volume despite a strong fourth quarter. In value terms, U.S. physical gold investment rose by a relatively modest 8 percent while retail selling of gold was brisk.

The World Gold Council also reports that rising prices has created a difficult climate for central bankers seeking to raise their gold reserves. And gold jewelry demand fell, pressured by surging prices.

Price pressure also created headwinds for gold demand for industrial and technical applications.

But all of this combined has not been able to halt gold's rise, at least not in any meaningful way, today’s price action not withstanding.

Speaking of this week’s price action, let’s recap that before we get to the David Morgan interview here.

And holy whipsaw market action Batman! Gold shot up over 10% earlier in the week but has now lost all of that and then some, checking in at $4,940 an oz to register a weekly loss – at least at this point – of 1.2%.

As for silver, the white metal is on a literal roller coaster here and we’re finally seeing the major pullback many have been waiting for. Off from its high of nearly $122 an ounce a day or two ago, silver is now coming in at $89.10 an ounce and falling fast. For the week it’s only down 14.2%, but obviously it’s off much more than that from its high – nearly 30% from the price we saw a couple of days ago.

Platinum is getting absolutely murdered here today as well, down more than 18% so far on the day alone. For the week it’s off 22.1% to come in at $2,174.  And finally, palladium is down 13.9% on the week, with virtually all of that coming today, to come in at $1,757 an ounce as of this Friday late morning recording.

My goodness what a week!

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