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After the astronomical upsurge of more than 100 percent in one year, we saw the gold price correct significantly from the end of January. In the space of three days, gold lost around 21 percent of its market value. The big question, of course, is: should we judge this fall in prices as the end of the bull market or will the outlook remain good?
The answer is less black and white than the price chart suggests. For now, the decline mainly seems to mark the end of the extreme gold rush that was visible in the first weeks of 2026.
In financial markets, euphoria is rarely a sustainable foundation. As soon as taxi drivers, hairdressers and distant nephews start talking enthusiastically about an investment, the moment often approaches when the last buyer has already bought and a top is in sight.
We saw that pattern not only in gold, but even more strongly in silver price. The speed of the increase, the widespread attention and the increasing sense that “everyone” had to get in are classic characteristics of an overheated phase in a bull market.
The subsequent price decline was therefore probably mainly a response to that overheating. At the height of the craziness, people no longer board for fundamental reasons, but simply out of fear of missing the boat.
It is precisely these kinds of investors who lack conviction and often sell again as soon as prices start to fall. As a result, the last part of an increase is often explosive, but the subsequent correction is usually even more explosive.
For investors who look at the long term, these types of price movements are not relevant. It is spectacular to see gold and silver temporarily rise like a rocket, but it is precisely the most explosive phases that rarely prove sustainable.
These outbursts of euphoria are therefore better regarded as noise. Visible and noisy, but rarely determines the long-term direction. The key question lies deeper: have the fundamental forces behind the increase actually changed? After all, these were the forces that resulted in an explosive period of gold rush. The craziness didn't come out of nowhere.
As long as geopolitical tensions persist, debt levels remain historically high, and central banks are caught between fighting inflation and economic growth, the structural case for precious metals remains largely intact.
In moments of extreme movement, it often helps to return to the core. Gold is essentially a financial asset that is separate from politics and economics. That sounds abstract, but simply means that it doesn't matter to gold whether China or the United States is the dominant global power.
You can say that, in theory, gold is largely insensitive to geopolitical shifts in power. This is fundamentally different for stocks. In fact, companies like Apple and Tesla are highly dependent on the global economic and political forces, and thus on the position of the United States within that system.
Currently, we are in a phase of heightened geopolitical uncertainty. Donald Trump's policy, for example, is making Europe increasingly explicit. doubted to the extent to which you can continue to rely on the United States as an ally. As a result, there is a growing desire to become more independent, not only in the field of defense, but also in terms of technology.
This movement is more visible. Also in Japan, where Sanae Takaichi won the elections this week won, calls for higher defense spending are louder. Concerns about China are increasing, while at the same time there are doubts about the naturalness of full US support in a possible crisis situation.
On several fronts, geopolitical relations are therefore slowly shifting. This does not necessarily lead to extreme scenarios, but one conclusion does arise: the uncertainty about what the world will look like tomorrow has clearly increased.
Exactly that's what makes it investing in gold and investing in silver more attractive at the moment. When the future becomes less predictable, investors adjust their portfolios. More and more parties seem to realize that a modest allocation to precious metals is not an unnecessary luxury in this geopolitical climate, but rather a form of insurance against the unknown.
The geopolitical uncertainty is also separate from a second structural problem: rising government debt worldwide. This issue is likely to accelerate rather than slow down, precisely because we are entering a phase where allies trust each other less naturally.
After all, extra investments in defense have to be paid for somewhere. In practice, this often means new debts. Geopolitical tension is quickly becoming a justification for further fiscal easing, and thus for an even faster increase in debt.
In that light, it seems premature to label the recent declines in gold and silver as the end of the bull market. Indeed, in the long term, the outlook remains favourable and there seems to be fundamental support for a strong decade for precious metals.
Gold prices fell 21% in three days after an explosive rally. Is this the end of the bull market or a healthy correction? Despite the panic, the fundamental outlook remains strong in a world of geopolitical uncertainty and rising debt.
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