Gold Stages Resilient Recovery Following Historic Plunge

Gold XC0009655157

The precious metal has demonstrated remarkable strength in the days following its most severe single-day decline in over four decades. As investors continue to assess the fallout from the dramatic sell-off, leading financial institutions are reinforcing their bullish long-term outlooks, arguing that the recent correction does not undermine the fundamental drivers supporting gold.

Key Developments:
- The price rebounded approximately 5.5% to around $4,914 per ounce.
- J.P. Morgan has raised its year-end price target to $6,300 per ounce.
- Central banks globally are projected to purchase 800 tonnes of gold in 2026.
- Ongoing geopolitical tensions and de-dollarization trends continue to provide underlying support.

Major investment banks have responded to the volatility not with downgrades, but with reaffirmed confidence. J.P. Morgan analysts increased their forecast, pointing to anticipated central bank acquisitions of 800 tonnes in 2026 and an intact structural diversification trend. Similarly, Deutsche Bank maintained its $6,000 per ounce target. Michael Hsueh, an analyst at the bank, stated that conditions are not yet ripe for a sustained trend reversal. The sell-off was characterized as overdone by Sucden Financial, which projected a moderate recovery in the near term.

The Anatomy of a Record Decline

January 30, 2026, is now etched in market history. Gold plummeted by 9.8% that day, marking its most significant daily loss since 1983. The plunge erased nearly $900 in gains per ounce within a matter of days, coming immediately after the metal had set an all-time high of $5,594.82 just one day prior.

Market experts attribute the crash to two primary catalysts: President Trump's nomination of Kevin Warsh as the new Federal Reserve Chair, and increased margin requirements imposed by the CME Group. The latter forced leveraged investors into liquidations, creating a technical effect that accelerated the downward spiral.

Central Bank Demand: A Cornerstone of Support

Sustained buying by official institutions forms a critical foundation for the gold market. J.P. Morgan anticipates purchases of roughly 755 tonnes for 2026. While this figure is below the over 1,000 tonnes seen in previous years, it remains substantially higher than the pre-2022 average of 400-500 tonnes.

Global central bank reserves have now expanded to nearly 36,200 tonnes. Gold's share of official reserves has risen to about 20%, up from approximately 15% at the end of 2023. According to Ryan McIntyre of Sprott Inc., central banks persist as strong buyers, seeking to diversify foreign exchange holdings and reduce reliance on the U.S. dollar.

Geopolitical Landscape Continues to Fuel Demand

The very geopolitical strains that propelled gold to record highs in January persist. Trade conflicts, tensions surrounding Greenland, and ongoing Middle Eastern uncertainties continue to bolster safe-haven appeal. This follows an impressive 2025, where gold surged roughly 65%, outperforming most other asset classes.

The World Gold Council outlines several potential scenarios for 2026. A cooling economy accompanied by additional interest rate cuts could lead to moderate gains for the metal. A more pronounced global downturn would provide significant support. A decline is only considered likely in the event of unexpectedly robust growth and rising rates. The coming weeks will reveal whether this correction represents a healthy consolidation after a record rally or the beginning of a more prolonged pause.

@ boerse-global.de | XC0009655157 GOLD