Gold, Silver Prices Plummet Up to 27% in a Month Amid Escalating US-Iran Tensions, Raising Questions About the Future of the Bullion Market

Gold and Silver Prices Experience Sharp Decline Amid Geopolitical Tensions

In the aftermath of the US-Israeli war with Iran, which commenced on February 28, the prices of gold and silver have witnessed a significant correction. Despite their reputation as safe-haven assets, gold prices have plummeted by 16% in a month, while silver rates have declined by 27%.

The correction is primarily attributed to liquidity pressures and the fading of Federal Reserve rate-cut bets. Broader market sell-offs have forced investors to liquidate precious metals to meet margin calls, exacerbating the downward momentum. Moreover, persistent inflation, driven by elevated crude oil prices, has prompted the markets to reassess their rate expectations, leading to a strengthening US dollar and real yields, which traditionally act as headwinds for non-yielding assets like gold and silver.

**Investors are now questioning whether this correction signals the end of the bull run in gold and silver. However, it is essential to note that this breather comes on the back of the best annual run-up in the gold and silver prices in over 40 years, with gold experiencing a 70% increase and silver over 150% in 2025.

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Technical analysts suggest that gold and silver are entering a consolidation phase, which may continue until the gold-to-silver ratio reaches levels of 80. Historically, this liquidation cycle can last anywhere from 6 to 60 months, with past examples including a 4-year breather in 1998 and a 9-month consolidation phase in 2008.

The end of the latest bull run in gold and silver prices is contingent on the bear market in the US. If the US manages to avoid a market crash until 2028, precious metals may experience a prolonged downturn, similar to 1998. However, Ametra PMS's CIO expects a revival in the gold and silver price rally, driven by a potential US market crash in 2026.

Market forecasts suggest that gold may trade in a $4,000–$5,600 per ounce range this year, with potential to test $6,000 in the second half if rate cuts materialize. Silver, if it holds above $90 per ounce, could test $120. Investors are advised to accumulate on dips rather than chase rallies, as the medium-term outlook favors higher prices, supported by enduring macroeconomic and geopolitical tailwinds.