LONDON, Jan 28, 2026, 22:28 GMT
- Gold and silver extended their rally, hitting new record highs amid renewed safe-haven demand.
- More strategists are sounding alarms that the rally appears overextended and could face sudden sharp corrections.
- The Fed kept rates unchanged, sparking debate over whether the next step will be a cut or a pause.
Gold surged 4% on Wednesday, holding near $5,400 an ounce in late U.S. trading. The metal’s sharp rally has also pushed silver close to record levels and lifted other precious metals. Peter Grant of Zaner Metals noted the rally “has kind of taken on a life of its own,” even as Standard Chartered warned silver might face a short-term pullback. 1
The jump is significant now that the Federal Reserve isn’t pushing the narrative with consistent rate cuts. On Wednesday, the U.S. central bank kept its benchmark rate steady between 3.50% and 3.75%. Chair Jerome Powell noted, “The economy has once again surprised us with its strength,” a statement that dimmed hopes for rapid, easy monetary policy moves. 2
Silver is turning up the heat on the trade — and it’s a double-edged sword. Spot silver soared 7.7% Tuesday to $111.84, after hitting a record $117.69 on Monday. It’s already climbed more than 57% this year, according to Reuters. Citi raised its short-term silver price target to $150 an ounce. But Bank of America strategist Michael Widmer cautioned, “There’s going to be a lot of volatility ahead, with risks of sharp pullbacks (in silver).” 3
Some technical analysts say warning signs are flashing on the charts. Satendra Singh, an analyst at Investing.com, spotted “signs of a strong reversal” in the gold-silver ratio — meaning the ounces of silver needed to buy an ounce of gold — following a bullish “doji star” pattern. Traders often interpret this candlestick signal as momentum running out. 4
Bitcoin.com’s latest analysis echoed familiar themes, drawing parallels to the 2008 cycle. Market veteran Chris Vermeulen warned that a steep pullback might wipe out 30% to 60% of the recent gold and silver rally, despite the metals potentially hitting new highs initially. 5
But stretched doesn’t mean done. In volatile markets, “overbought” — traders’ shorthand for prices running too far, too fast — can stay that way if fear deepens, the dollar slides further, or fresh buyers jump in on dips. Reversals usually need a spark, and those rarely arrive cleanly.
The pullback chorus is growing louder, especially on silver, which typically swings more wildly than gold. Marko Kolanovic, JPMorgan’s ex-quant chief, warned on X: “Silver is almost guaranteed to drop ~50% from these levels within a year or so,” though he also highlighted the risks of betting against a market prone to sharp moves both ways. 6
On social media, the cautionary tone has spilled over into a wider “what’s next” discussion spanning both metals and crypto. Dan Gambardello noted that “every single asset that goes truly parabolic…has eventually corrected hard or crashed,” framing the recent gold and silver surge as a classic late-stage move. 7
So far, the tape shows demand holding up. The big question: does this lead to a slow, steady climb or a sudden drop that shakes out latecomers? Traders stay focused on two key factors: the pace at which safe-haven fears subside and whether the Fed’s upcoming signals shift the calculus on owning interest-free assets.
