Gold, silver stabilise post sell-off; UBS sees gold at $6,200/oz by June, July 2026

Gold and silver are showing tentative signs of stabilisation after last week’s historic sell-off, but analysts warn that the path ahead is unlikely to be smooth, with volatility expected to persist in the near term. The sharp correction had raised concerns that the prolonged rally in precious metals may have reached an inflection point. However, following steep losses -- gold plunging over 15% and silver sliding more than 30% in just two sessions -- both metals have mounted a notable rebound.

Spot gold has recovered around 5% from recent lows, while silver is up roughly 8%, supported by bargain hunting, short-covering, and technical retracement. Despite this bounce, market participants remain cautious, noting that the recovery could be uneven as investors continue to reassess macroeconomic and policy signals.

UBS, however, has pushed back against the idea that the recent correction signals the end of the gold bull market. In a report released on February 1, 2026, the UBS Chief Investment Office said that while the fall was severe, it was not unusual within a broader upward trend. The firm reiterated its constructive stance on gold, arguing that the conditions that typically bring bull markets to a close are not yet in place.

Why gold fell so sharply

UBS attributed the sharp decline in gold prices to a shift in expectations around US monetary policy following former US President Donald Trump’s announcement of Kevin Warsh as his nominee for Federal Reserve chair. Warsh is widely viewed as an advocate of stricter monetary discipline, slower balance sheet expansion, and institutional reform at the Fed.

According to UBS, the nomination strengthened the US dollar and raised concerns about higher interest rates—both negative for gold. The sell-off was further intensified by profit-taking after strong recent gains, thinner liquidity in futures markets, and forced liquidation after exchanges raised margin requirements. UBS described the move as “the most substantial one-day decrease in 13 years,” noting that similar volatility spikes have historically accompanied changes in expectations around Federal Reserve policy.

Why UBS believes the bull market is intact

UBS stressed that sharp daily declines alone do not end gold bull markets. “Gold bull markets typically don’t conclude simply because fears diminish or prices become too high; they end when central banks establish their credibility and pivot to a new monetary policy regime,” the firm said.

Drawing on historical parallels, UBS pointed to 1980, when aggressive tightening under Paul Volcker restored confidence in US monetary policy, drove real interest rates sharply higher, and ushered in a prolonged period of dollar strength. A similar dynamic played out in 2013, when gold fell after the Federal Reserve convinced markets it could unwind quantitative easing without destabilising the financial system. In both episodes, inflation expectations declined, real yields rose, and confidence in central banks was durably restored—conditions UBS says are absent today.

Current market positioning

Against this backdrop, UBS continues to see meaningful upside for gold, reiterating that the recent correction does not mark the end of the ongoing bull market. With spot gold at around $4,894 per ounce as of January 30, UBS has maintained its mid-year price forecast of $6,200 per ounce, implying upside of roughly 27% from current levels.

“Gold bull markets typically don’t conclude simply because fears diminish or prices become too high; they end when central banks establish their credibility and pivot to a new monetary policy regime,” UBS said. The firm added that such a regime shift has not yet occurred, noting that US real interest rates are expected to decline further and markets continue to price in policy easing. In the near term, UBS expects gold prices to consolidate in a $4,500–$4,800 range due to positioning, thinner liquidity and higher futures margin requirements, before fundamentals reassert themselves.

Market pricing, UBS noted, continues to reflect expectations of further monetary easing. Fed funds futures imply around 53 basis points of rate cuts by the end of 2026, broadly in line with UBS’s expectation of two additional cuts. US real interest rates are also projected to decline further.

Outlook and price targets

UBS continues to rate gold as “Attractive.” With spot prices at $4,894 per ounce on January 30, 2026, the firm has set a mid-year target of $6,200 per ounce, implying an upside of about 27%. “Since Warsh hasn’t demonstrated the same credibility as Volcker, we don’t believe this is the end of gold’s bull market,” UBS said.

In the near term, UBS expects consolidation between $4,500 and $4,800 per ounce, citing positioning, lower liquidity, and higher margin requirements, including a hike in COMEX gold futures margins from 6% to 8%. Beyond this phase, fundamentals are expected to reassert themselves, supported by strong demand data from the World Gold Council, sustained central bank buying, higher ETF inflows, and continued bar and coin demand amid lower real rates and geopolitical uncertainty.

Adding to the mixed outlook, Ross Maxwell, Global Strategy Operations Lead at VT Markets, said easing trade tensions, following a sharp reduction in tariffs on Indian goods, could temper fear-driven demand for bullion. “Gold and silver prices will be looking to balance between lower trade tensions and persistent macro uncertainty,” Maxwell said, adding that gold remains attractive as a strategic hedge, while silver could benefit from improved industrial demand.

Echoing the cautious optimism, Hareesh V, Head of Commodity Research at Geojit Investments, said the correction appeared driven by short-term catalysts rather than a shift in long-term fundamentals. Renisha Chainani, Head of Research at Augmont, added that such volatility is typical during strong momentum phases. “The long-term trend remains constructive,” she said, suggesting that recent dips could offer buying opportunities, even as resistance is expected near the $4,750–$4,800 zone.