Is the golden bull still here? Analyst: The previous two bull markets experienced multiple significant pullbacks; declines are a good opportunity to add to your positions.

Despite experiencing a historic plunge last week, market observers believe that the gold bull market is far from over. Analysts generally see the recent sharp volatility as a temporary correction within a long-term upward trend rather than a structural reversal. Historical data shows that such corrections often present buying opportunities for re-entry.

The precious metals market has recently undergone intense fluctuations. After soaring 66% throughout 2025 and continuing into early 2026, gold prices suffered a heavy blow last Friday, dropping nearly 10% in a single day and dragging silver, palladium, and platinum significantly lower. The trigger for this sell-off was the nomination of Waller as the next Federal Reserve Chair, which markets interpreted as easing concerns over the Fed’s independence. This was the most severe single-day decline in gold prices in 13 years.

However, the market quickly entered a recovery mode. As investors reassessed the situation, spot gold rebounded strongly by over 6% on Tuesday, closing near $4,946.81 per ounce. The rally continued into Wednesday morning, with spot gold rising about 3% to $5,079.40 by 3:45 a.m. Eastern Time, and New York gold futures jumping 3.3% to $5,093.80.

Institutional strategists point out that, despite signals flashing “overvalued” on screens, geopolitical tensions, trade policy uncertainties, and debt concerns supporting gold prices have not dissipated. Multiple investment banks’ analyses indicate that the current decline has not broken the long-term investment logic and may instead present a buying opportunity within this historic bull market.

History Repeats: Normalcy of Corrections in a Bull Market

Russ Mould, Investment Director at AJ Bell, noted in a Monday report that gold is currently in its third major bull market since 1971, and both previous bull markets experienced multiple significant corrections.

Mould explained that the 1971–1980 bull market began when President Nixon severed the dollar’s link to gold. Subsequently, driven by rising US deficits, oil shocks, and soaring inflation, gold prices surged from $35 per ounce to a peak of $835 in 1980. According to data from AJ Bell and LSEG, gold prices during this period experienced multiple declines, with the longest “correction phase” lasting 105 days and the steepest drop reaching 19.4%.

Similarly, during the 2001–2011 bull market, data recorded five price corrections, each with declines of up to 16%. Mould believes the current bull market started in 2015 and has already undergone five corrections, including a more than 20% drop in 2022 before last week’s pullback. He emphasizes that geopolitical uncertainties, stubborn inflation, and soaring government debt form the foundation of gold investment, and since these issues remain unchanged compared to last week, this sudden dip may be an opportunity to increase holdings.

Central Bank Demand and Valuation Premium

George Cheveley, Portfolio Manager at Ninety One’s Natural Resources team, told CNBC that from a historical perspective, the current strength in gold aligns more with the late stage of the cycle rather than an early speculative rebound. However, he added that a key differentiator in this cycle is: the scale and persistence of central bank demand.

In an email, Cheveley stated that central bank demand has become a more important market driver than ever before, providing structural support that was absent in previous cycles. Although data from the World Gold Council shows that net central bank purchases in 2025 fell from 345 tons in the previous year to 328 tons, Cheveley believes that as long as real yields remain low and uncertainties around growth, debt, and geopolitics persist, gold will remain resilient.

Strategists at Barclays also noted in a Tuesday report that, although models suggest gold is “overvalued” relative to a fair value of around $4,000, this premium appears to be durable and does not indicate a bubble. They pointed out that historical cycles show that mispricing between price and fair value can last for years, supported by inflation, US policy issues, and the long-term depreciation trend of the dollar.

The Fed’s Credibility Is Not the Only Signal of an End

UBS’s Chief Investment Office stated in a Monday report titled “Not the End” that gold bull markets typically do not end solely because fear subsides or prices become overextended; only when the central bank rebuilds credibility and shifts to a new monetary policy framework will the bull market conclude.

UBS analysis notes that in 1980, Paul Volcker’s strict monetary policy effectively restored the Fed’s credibility, leading to a sharp rise in real interest rates and a long-term dollar appreciation, which ended that gold bull market. However, UBS strategists believe that, since Kevin Warsh has not demonstrated the same level of credibility as Volcker, the current sell-off does not signal the end of the bull market. Over the past year, the dollar index has fallen more than 10%, reflecting market concerns over central bank independence and White House policy mix.

UBS’s team believes that gold is currently in the mid-to-late stage of this cycle, shifting from a sustained upward trajectory to a phase of reaching new highs with intermittent 5–8% pullbacks. The report emphasizes that the typical factors ending a gold bull market—persistently high real yields, a structurally strengthening dollar, geopolitical improvements, and fully rebuilt central bank credibility—are not present at this time. UBS forecasts that gold prices will reach $6,200 next month and then retreat to $5,900 by year-end.

Risk Warning and Disclaimer

        The market carries risks; investments should be made cautiously. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Invest accordingly at your own risk.