Even after gold (and silver) prices fell on Friday, the craze may not be over yet. People are reportedly queuing up to buy gold bars around the world, from Sydney to Singapore, certainly making the latest plunge in the price of the shiny metal feel more like a buying opportunity. Of course, the decline at the end of January does feel a bit exaggerated.
Indeed, will the announcement of a new Fed chair actually derail a deal that still has stable fundamentals and long-term drivers?
Time will tell how long the so-called “Walsh washout” lasts. Regardless, the fragility of gold prices creates a more opportunistic atmosphere for investors in February. As for whether the latest plunge is the start of a bear market lower and begins to pare last year’s gains, that remains a trillion-dollar question. Regardless, I don’t think there’s anything special about gold’s painful 10% decline.
Suffice it to say, this correction makes me even more bullish on the sustainability of gold’s likely multi-year trend as the “depreciation trade” continues to play out. Of course, before you start hoarding gold or buying gold mining stocks on weakness, investors should take a step back and put things in perspective.
Yes, a single-day drop of 10%, which puts the asset down nearly 14% from its recent peak in January 2026, is a painful experience. But gold is still poised to rise significantly into 2026, having gained more than 7% since the start of 2026. Even after the recent correction, gold prices are still up a ridiculous amount in one month. Even if volatility levels continue to rise, I am inclined to believe that selling pressure in silver and other metals may provide some support for gold. Why?
Silver’s surge was even more dramatic, while its implosion was three times more horrific (a 30% drop in one day). My guess is that silver investors will start to consider converting some of their silver profits into gold, if not for complete stability, then perhaps for relative stability. While gold prices have pulled back, silver and other metals have fallen sharply.
If this metals crisis turns out to be far from over, the downward trend could continue to amplify. As an industrial metal, often a by-product of gold production, silver is expected to see sharper moves in both directions. Given the boom-and-bust nature of silver, I think the safe-haven option gold is the better choice as the red-hot metal trades.
While some may argue that gold, a safe-haven asset (and to some a safe-haven asset or a hedge against macro chaos), has become increasingly vulnerable after the latest plunge, I do think that miners have a relative chance as markets overreact in what appears to be panic.
JP Morgan recently raised gold prices to $8,000-$8,500, so a 10% decline seems too good to miss. Gold is not only a shiny bond alternative, but an asset that can truly hold up when the stock market deteriorates. Can gold really achieve an increase of around 70%? Only time will tell.
Jumping into the depths of golden waters is not without risk. However, if you’ve been waiting for gold to plunge, don’t let fear stop you from buying an ounce or a few shares of your favorite mining company on the way down. Anglo-Ashanti Gold Corporation (NYSE:AU) stands out as a relative bargain after falling nearly 20% from its peak in just a few days. Shares of this well-run mining company currently trade at a forward price-to-earnings (P/E) ratio of nearly 12.0 times, which doesn’t seem to make much sense given the trend in gold over the past year.
Even though stocks are facing a bear market, I’m a big fan of gold investors looking to capitalize on the latest round of panic selling. Perhaps the biggest reason to choose AngloGold Ashanti over its rivals is the 2.3% dividend yield, which could rise to over 3% if a gold price correction brings more pain. Either way, the company is a cash cow that can provide more dividend growth over time.
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