The simultaneous rise of gold and silver in the New Year: The tug-of-war between rebalancing risks and policy expectations

SpeakWithHatOn · 2026-01-04T18:34:57+00:00

The precious metals market in 2026 continues its strong trend, with gold and silver prices rising, supported by expectations of interest rate cuts by the Federal Reserve. However, short-term gains come with structural adjustment risks, and the market may face selling pressure on holdings. Investors should exercise caution in responding to market volatility.

SpeakWithHatOn

2026-01-04 18:34:57

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At the beginning of 2026, the precious metals market continues its strong momentum, with both gold and silver prices rising, marking the best annual performance since 1979. Behind this rally are policy support and hidden risks of structural adjustments.

Federal Reserve Rate Cut Expectations Fuel Gold Price Imagination

The bullish sentiment for precious metals has become the mainstream consensus among major banks. The Federal Reserve is expected to further implement rate cuts, while President Trump is reshaping the Fed’s leadership, these policy changes provide a solid foundation for gold’s upward movement. Goldman Sachs has even provided specific forecasts, predicting gold prices will break through $4,900 per ounce.

Short-term Relief, Long-term Concerns

However, Tim Waterer, Chief Market Analyst at KCM Trade, offers a note of caution. He points out that this round of precious metals movement is similar to that of 2025, with the selling pressure at the end of last year largely digested, creating a short-term breathing space for the market. But this calm may just be the lull before the storm.

Index Rebalancing Sparks Positioning Panic

Senior Commodity Strategist Daniel Ghali at TD Securities issued a clearer warning. He predicts that within the next two weeks, the Comex silver market will face a total position reduction pressure of up to 13%. Once this index rebalancing operation begins, it will directly lead to significant adjustments and downward pressure on silver prices.

Post-holiday liquidity remains fragile, and low liquidity often amplifies any sudden volatility, causing price fluctuations to exceed expectations. This poses a clear threat to short-term traders.

A Critical Moment to Balance Growth and Risks

The market is at a delicate equilibrium: policy positives are competing with positioning risks, and investors need to accurately grasp the rhythm within the first month of the new year.

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