Gold and Silver Plunge as $430B Is Wiped Out, Why Are Precious Metals Falling?

• Gold and silver face sharp volatility as higher Treasury yields and a stronger dollar pressure the gold price and silver price
• The gold forecast remains bullish among some analysts, with targets above $5,000 for gold and $120 for silver by 2027
• The precious metals outlook remains tied to Fed policy, yields, inflation, and the dollar as investors watch for a potential recovery

The precious metal sector is facing extreme volatility at present. Gold and silver prices have plunged from their recent highs as broader macro repricing takes center stage. The spot gold price is trading around $4,186, after falling about 6% in September alone. Silver is also set for a weekly loss, as higher Treasury yields and a stronger US dollar continue to weigh on the gold and silver price arena. A total of $430B has been erased as the precious metal sector encountered heavy volatility during a 90-minute selloff.

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Why Are Gold and Silver Falling?

Gold and silver prices are falling primarily due to changes in the bond market. The US 10-year Treasury yield has recently climbed sharply, with long-dated Treasury yields reaching their highest levels in around two decades. Higher yields can make assets like gold and silver appear less lucrative, impacting their demand in the process.

Moreover, the US dollar has also been gaining strength as of late. A stronger US dollar makes bullion more expensive for buyers using other currencies. This combination of higher Treasury yields and a stronger US dollar has added pressure on gold and silver prices, making them volatile at present.

Moreover, Fed expectations are also impacting the precious metal sector presently. Earlier this week, markets had been pricing in a higher chance of a Fed rate hike in October. Those expectations have, however, dropped to around 28%. But the possibility of a rate hike is keeping the precious metals sector on edge at the moment.

In addition to this, higher energy prices are creating a possibility for energy-driven inflation, which could make it harder for the Fed to ease policy and prove detrimental for gold price and silver price.

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What Are Analysts Saying About the Precious Metals Sector?

While gold and silver prices continue to project a wobbly stance, analysts at Morgan Stanley have already issued a bullish call for the assets. Morgan Stanley’s Amy Gower believes gold can move above $5,000 and silver can reach $120 by the second half of 2027.

In addition to this, Rashad Hajiyev, a leading metals analyst, has shared a new gold forecast with the asset having the potential to hit $7K.

Gold may hit the $7K mark after it goes through a corrective phase.

“January 28, 2026, in the previous cycle. If gold completed a correction and is about to start a new cycle, then gold could reach over $7k by March or April 2027…”

Hajiyev further shared an update for silver, adding how the asset may hit $77 once it resumes its breakout position in the near future.

For now, investors are keenly watching how the prices of gold and silver perform as macroeconomic events continue to change the assets’ trajectory.

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