Top Global Traders Comment: When Will Gold and Silver Rebound?

Wall Street's view on the recent surge and plunge in gold prices is largely consistent: the fundamental logic supporting gold prices remains—the central banks are buying, de-dollarization/inflation expectations persist, and macro policy uncertainty.

But short-term capital has overstretched the market. Goldman Sachs believes that speculative short-term funds and retail physical demand have crowded trading, so when volatility spikes, it triggers stop-losses and forced liquidations. Traders are now generally cutting positions and leverage, playing more with volatility rather than single-directional bets.

The disagreement revolves around how deep and how long this correction will last: Goldman Sachs' commodity research still expects $5,400 by the end of 2026 and thinks the probability of moving higher is greater; Infrastructure Capital’s Jay Hatfield outright says the market has long departed from fundamentals, and it's all momentum trading.

Short-term: Volatility remains high, a rebound may need another round of position washout

Goldman Sachs’ trading desk thinks the most important thing now is re-pricing volatility and clearing out positions. Traders note that the volatility market is already misaligned; 1-month implied gold volatility remains elevated, increasing transaction costs that, when triggered, create chain reaction stop-losses. In this environment, “when the rebound happens” really depends on “when volatility cools, and leverage and retail positions shrink.”

Goldman traders also offer a pragmatic observation: with pressure not fully relieved, gold prices may need to probe for a bottom again.

GUPTA from Goldman’s precious metals trading and GILLIARD from commodity sales say: We recognize the long-term bull logic, but have reduced positions in the short term due to amplified volatility.

“We have cut directional long positions, believing market stress in volatility (1-month gold volatility at 40%) combined with high retail long concentrations could push gold to $4,600/oz (as example support). This is similar to the October 2025 selloff: We still recognize the structural bull case, but prices have risen too fast in the short term; volatility shocks have already triggered stop-losses.”

Medium-term: Goldman still bets on $5,400 gold by end-2026, more upside risks

For the medium term, Goldman’s research division has not lowered its target due to short-term turmoil, still predicting $5,400 gold by December 2026. This forecast is based on three assumptions: central banks maintain the pace of the past 12 months (60 tons/month), the Fed cuts rates twice by 25 bps in 2026, and no further private sector allocation to gold.

The research also stresses that upside risks remain prevalent, since additional private sector allocation to gold is “very likely.” The reasoning is that global macro policy uncertainty will be hard to resolve by 2026, and gold’s share in private investment portfolios remains low.

STRUYVEN from Goldman’s commodity research division: Based on central bank gold buying, Fed rate cuts, and no further private sector allocation, we maintain December 2026 gold target of $5,400.

“We continue to expect gold at $5,400 in December 2026. The forecast is based on: 1) central banks maintaining gold buying at past 12-month levels (60 tons/month); 2) Fed cutting rates twice by 25bps in 2026; 3) no additional private sector allocation (i.e., steady macro policy hedging demand). Risks remain skewed to the upside as private sector allocation demand may persist: ongoing global macro policy uncertainty (e.g., developed economy fiscal sustainability) is unlikely to be fully resolved by 2026; gold allocation remains low (0.2% of U.S. private portfolios in gold ETFs as of Q3 2025). Long-term institutional and wealth clients we interact with all indicate intent to build/increase gold allocation in their strategic portfolios.”

Diverging sentiment: One side “panic-buying out of stock,” the other calls it pure momentum trading

In contrast to traders “de-risking, waiting for volatility to fall,” physical-market sentiment is much hotter. Heraeus Precious Metals’ trading head says he’s never seen such extreme market moves in his career, with some sizes of gold bars sold out weeks in advance and consumers still lining up. This robust physical demand supports the medium-term bull narrative, but also signals that “price stability” is being challenged.

Meanwhile, some institutional investors describe the previous rally as momentum-driven, believing the retreat is a typical outcome of high-level momentum trading.

Dominik Sperzel (Head of Trading, Heraeus Precious Metals): Crazy market, public enthusiasm for gold is off the charts.

“This is the craziest market of my career. Gold is supposed to be a symbol of stability, but such volatility is anything but... Some gold bar sizes are sold out weeks ahead, with people still lining up for hours to buy.”

Jay Hatfield (CIO at Infrastructure Capital Advisors): Precious metals now just momentum trades, waiting for a correction.

“We concluded three to four weeks ago that this had become momentum trading rather than fundamental. We are simply going with the flow, waiting for this type of correction to happen.”

Trader response: Reduce directional risk, watch volatility curve and position size

On “when the rebound will happen,” Goldman traders give more technical/reactive signals: reduce directional exposure, pay attention to expensive pricing at the front end of the volatility curve, use smaller positions as nominal value and volatility in gold are much higher than before.

KIM from Goldman’s commodities trading desk: Slashed directional risk, recognize the central bank purchase logic for medium term, but speculative demand pushed prices too quickly.

“We have substantially cut directional risk exposures. Medium term, the logic from central bank buying remains intact, but speculative demand has pushed prices up too quickly and too early; holding large beta risk now is uncomfortable. There are some interesting volatility opportunities—the volatility market is misaligned, short-term volatility curve premium is significant, which could be a reversal opportunity as the market normalizes. Also, we need to rethink position sizing: The nominal value and volatility of one ounce of gold is nothing like before, so we’re responding by downsizing positions.”

Risk warning and disclaimerThe market involves risk, investment needs caution. This article does not constitute personal investment advice, nor does it consider the unique investment objectives, financial situations, or needs of individual users. Users should consider whether any views, opinions, or conclusions in this article suit their particular circumstances. Investments made on this basis are at your own risk.