TLDR
- Gold prices rose 2.3% to $5,060.28 per ounce on Wednesday, extending a recovery from last week’s $1,000 crash.
- Military confrontation between U.S. and Iran in Arabian Sea pushed investors toward precious metals as safe haven assets.
- Goldman Sachs sees upside to $5,400 year-end target while Deutsche Bank maintains $6,000 forecast despite recent volatility.
- China’s largest gold ETFs experienced record $1 billion withdrawal on Tuesday as investor confidence weakened after price crash.
- Silver and platinum also gained ground with increases of 2.8% and 3% respectively as precious metals markets stabilized.
Gold prices climbed above $5,000 per ounce on Wednesday as fresh military action between the United States and Iran boosted appetite for safe haven investments. The precious metal extended its rebound after posting a 6% gain in the previous trading session.
Spot gold advanced 2.3% to $5,060.28 per ounce during Asian market hours. April gold futures jumped 2.9% to $5,078.96 per ounce. The gains mark a turnaround from last week when prices dropped more than $1,000 from record levels.
Military tensions flared after the U.S. Navy shot down an Iranian drone over the Arabian Sea. Separately, Iranian gunboats were observed approaching a U.S.-linked tanker in the Strait of Hormuz. The confrontations occurred ahead of diplomatic negotiations planned for Friday between Washington and Tehran.
Gold reached an all-time high of nearly $5,600 per ounce on January 29 before experiencing its sharpest decline since 2013. Silver recorded its biggest single-day percentage drop in history during the same selloff. The crash began during Asian trading on Friday and carried through early this week.
Chinese Investors Exit Gold Positions
Chinese investors pulled nearly $1 billion from the country’s four largest gold-backed ETFs on Tuesday. The withdrawal represents the largest single-day outflow on record for these funds. The same products had been seeing unprecedented inflows just one week ago during gold’s rally to record highs.
Daniel Ghali from TD Securities stated that forced selling appears to have concluded in precious metals markets. He added that recent volatility might discourage retail participants from returning soon. This group had provided important buying support during the January rally.
Gold still shows gains of 15-17% for 2026 despite the recent turbulence. Silver rose 2.8% to $87.50 per ounce on Wednesday. Platinum increased 3% to $2,286.72 per ounce as the broader precious metals sector recovered.
OCBC analysts noted that margin-related liquidation and forced selling have subsided for now. They cautioned that markets remain vulnerable to movements in the U.S. dollar and shifts in Federal Reserve policy expectations. The firm described the selloff as a price correction rather than a change in the overall upward trajectory.
Investment Banks Hold Firm on Price Projections
Deutsche Bank stood by its forecast for gold to climb to $6,000 per ounce by year-end. Goldman Sachs analysts Lina Thomas and Daan Struyven indicated they see potential for prices to exceed their $5,400 target. Bank of America expects continued volatility but maintains a constructive outlook on precious metals.
Fidelity Fund liquidated some gold positions ahead of the selloff but is monitoring for buying opportunities. Portfolio manager George Efstathopoulos told reporters the fund plans to rebuild its gold exposure at more attractive price levels.
ANZ researchers emphasized that core support factors for gold remain in place. These include geopolitical risk, physical demand from consumers, and ongoing purchases by central banks worldwide. OCBC maintained its 2026 price objectives of $5,600 per ounce for gold and $133 per ounce for silver.
The January surge was driven by momentum trading, geopolitical uncertainty, and questions about Federal Reserve independence. Concerns emerged after President Trump nominated Kevin Warsh to lead the central bank. The nomination sparked speculation about a less accommodative monetary policy stance, which initially pressured gold before the recent rebound.
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