Analysts and market observers told CNBC that the powerful rally that pushed gold and silver to record highs during 2025 could resume if a peace agreement is reached between the United States and Iran, as prices climbed again on Thursday.
Spot gold rose 1.2% to $4,750 per ounce in early trading amid hopes that the United States and Iran are close to reaching an agreement that would end the 69-day war.
US gold futures also gained 1.2% to settle near $4,750 per ounce.
Meanwhile, spot silver rose 3% to $79.62 per ounce, while July silver futures jumped 3.9%.
Gold and silver had recorded historic gains during 2025, with gold surging about 66% and silver rising 135% over the year. However, trading became more volatile during 2026, as silver futures suffered their biggest daily loss since the 1980s at the end of January, while gold lost more than 10% from its January peak.
Since the outbreak of the war between the United States and Iran on February 28, gold’s reputation as a safe haven during periods of turmoil has come under pressure after some of the factors supporting its rally were called into question.
Ross Norman, CEO of precious metals platform Metals Daily, said that the possibility of higher interest rates, the strength of the US dollar due to rising oil prices, and profit-taking by traders all contributed to gold’s recent decline, especially as the yellow metal entered the war in a “heavily overbought” condition.
He added that this gave traders an opportunity to lock in profits and pushed the market into a consolidation phase after investors began selling their best-performing assets.
Francis Tan, chief Asia strategist at Indosuez Wealth Management, described this characteristic as “extremely useful” during the market turmoil in March.
He explained in an interview with CNBC that investors who held part of their portfolios in gold during the stock market decline achieved strong returns and were able to sell part of their holdings to offset equity losses.
He added: “Gold has already done its job as a safe haven.”
During the war period, gold moved inversely with both oil prices and the US dollar.
Norman said: “The dollar and gold rose together, with the dollar benefiting from safe-haven capital flows amid disruptions to energy supplies, while gold benefited from safe-haven inflows. But a peace agreement means these supporting factors begin to fade, and that is what we are seeing now. It is as if the brakes on gold and silver have been removed.”
Where are prices heading?
Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, has maintained a bullish view on gold and silver for a long time, stressing that current volatility has not changed his conviction that further gains remain possible.
He said the recent pullback in gold and silver prices represents only a “consolidation phase.”
He added: “This time, precious metals have shown a strong correlation with equities. Both came under pressure due to fears that inflation could lead to higher interest rates.”
He continued: “In our world, interest rates represent gravity. When rates rise, gravity strengthens and all assets decline, including precious metals.”
As the Iranian war continued, along with warnings about price shocks and slowing economic growth, markets quickly priced in expectations that monetary easing cycles in several major economies would pause, with some central banks potentially resorting to interest rate hikes to counter the impact of rising energy prices.
However, optimism returned to markets on Wednesday after reports indicated that the United States and Iran were close to a peace agreement, which was reflected in a recovery in precious metals alongside rising equities.
Gijsels said: “We expect the long-term bull market in gold and silver to resume its course, with prices reaching new record highs in the not-too-distant future, possibly this year.”
He added: “All the factors that pushed gold and silver to these levels remain strongly in place.”
He explained that central banks and governments will continue diversifying reserves away from US government bonds toward gold, adding: “We are living in a structurally high-inflation environment, and therefore real assets must be held, with precious metals forming a core part of them.”
He noted that as the “fog of war” clears, investors will return to the gold and silver markets once again.
He described the recent decline in prices as “not the end, but merely a temporary pause in what may become the strongest and longest bull market in the history of gold and silver.”
Paul Williams, CEO of gold and silver specialist Solomon Global, also said that forecasting prices remains difficult as long as the war continues, particularly for silver, which is more volatile.
However, he pointed out that the market fundamentals supporting silver’s rise in 2025 remain intact, explaining that physical silver supplies remain limited while strong demand from green technology sectors continues.
He added that the war between the United States and Iran has also reinforced the strategic importance of solar energy, alongside continued growth in demand linked to artificial intelligence technologies, increasing pressure on a market already suffering from a supply-demand imbalance.
Silver is used in a wide range of industrial applications, from computers and mobile phones to solar panels and automobiles.
Despite expecting continued short-term volatility until a lasting agreement is reached between Washington and Tehran, Williams stressed that prices will remain supported over the long term.
He added: “I expect further gains and favorable conditions as more investors move toward physical assets outside the traditional financial system.”
He noted that if a peace agreement is signed, silver is likely to benefit from improving economic sentiment, rising industrial demand, and increased investor risk appetite, while gold would initially lead any safe-haven rally if negotiations fail, before silver quickly follows due to limited physical supply.
www.economies.com