Bullion Turning Point: Why Some Analysts Favor Gold Over Silver as the Historic Rally Pauses
Precious metals have been at the centre of one of 2025–26’s most striking financial market narratives: a parabolic rally in gold and silver. But as these metals pause at record price levels, some technical analysts are calling for a tactical shift — favoring gold over silver in the near term.
Introduction: A Rally Unmatched in Modern History
As 2026 dawned, both gold and silver prices surged to all-time highs, drawing intense global investor interest. In January alone, gold crossed above $5,000 per ounce for the first time, while silver flirted with — and in some data surpassed — $120 per ounce, remarkable levels following a multi-year rise tied to macroeconomic uncertainties.
Gold’s ascent has been driven by safe-haven demand, central bank purchasing, a softer U.S. dollar and lingering geopolitical risk. Silver’s rally has been amplified by the same drivers, but also by its industrial demand component, which makes it both a store of value and an industrial commodity.
Into this context comes Carter Worth, a well-known technical strategist often cited in financial media, who has recently argued that the latest leg of the metals’ run may be unwinding — and that a strategy of holding gold while reducing exposure to silver might now make sense.
Understanding the Call: Go Long Gold, Short Silver
Technical analysis — rather than fundamental economic forecasting — underpins Worth’s recommendation. Technical strategists study price patterns, ratio dynamics and sentiment indicators to identify markets that look overextended or ripe for reversal.
In the metals complex, one widely watched signal is the gold/silver price ratio — a measure of how many ounces of silver it takes to buy one ounce of gold. Historically, this ratio has fluctuated, but extreme values can signal technical stress.
A rising ratio (gold becoming relatively more valuable than silver) after long periods of dramatic silver strength can indicate profit-taking and mean-reversion in silver prices. At the same time, gold’s relative strength may reflect investors continuing to seek a safe haven amid risk off-moves in broader markets. Analysts like Worth interpret this as a tactical opportunity:
- “Go long” (buy or hold) gold to capture continued strength or hedge risk.
- “Go short” (sell or reduce exposure) in silver if its rally is unwinding and volatility increases.
This “pairs trade” — long gold, short silver — doesn’t require predicting direction only of one metal, but rather anticipating which metal will outperform the other.
What Fueled the Historic Bull Run? The Broader Market Context
1. Macro and Monetary Forces
The extraordinary price performance of precious metals in recent quarters has been linked to:
- Geopolitical tensions and uncertainty, which traditionally push capital into perceived safe assets like gold.
- Inflation expectations as global debt levels remain elevated, encouraging investors to seek inflation hedges.
- U.S. Federal Reserve policy uncertainty, including expectations of rate cuts followed by sudden shifts toward tighter policy in early 2026.
- Central bank gold buying, as nations diversify reserves away from conventional debt and currencies.
India’s gold demand, typically dominated by jewellery consumers, fell in 2025 as record price levels pressured discretionary buying, even as investment demand remained strong.
2. Silver’s Dual Role
Unlike gold — which is nearly all demand-based for wealth storage and reserve allocation — silver has a significant industrial component. Its applications range from electronics to solar panels and even emerging technologies like AI infrastructure.
This dual nature helps explain why silver has been so volatile: near-term industrial demand flows can amplify price moves that are already driven by financial speculation and safe-haven trading.
3. Market Structure and Liquidity
Precious metals markets, while large, still have lower liquidity than equities or major currencies. This makes them susceptible to sharper moves when directional bets increase — especially in futures and ETF instruments tied to gold and silver.
This technical backdrop contributed to price accelerations that, while impressive, now may be ripe for profit-taking and mean reversion.
Impact on Stakeholders: Investors, Consumers and Markets
Retail Investors and Traders
For many traders, the meteoric rise in metals offered profits — but the recent moderation or technical unwinding raises risk concerns.
- Silver’s volatility, already higher than gold’s, could lead to sharper swings and increased margin calls on speculative positions if the market pivots.
- Gold’s position as a portfolio diversifier remains intact, but high price levels also expose holders to drawdowns should broader markets stabilize.
Consumers and Jewellery Markets
In markets like India — one of the world’s largest gold consumers — record prices have discouraged traditional jewellery buying. This shifts demand toward heavier investment gold products and bullion, altering seasonal and cultural buying patterns.
For silver, industrial buyers may absorb some price pressure, but significantly higher input costs could eventually feed through to finished goods in areas like photovoltaics and electronics.
Producers and Mining Stocks
Mining companies benefited strongly during the rally, with share prices appreciating alongside metal prices. However, a shift in metal premiums could compress profit margins for producers with higher exposure to silver.
Risks and the Road Ahead: What Comes Next?
Monetary Policy and Dollar Movements
One of the most significant near-term variables remains U.S. monetary policy. Stronger dollar expectations — as occurred when markets priced in a more hawkish Federal Reserve chair appointment — can exert downward pressure on dollar-priced assets like gold and silver.
Geopolitical and Inflation Dynamics
If geopolitical tensions persist or inflation forces central banks into unconventional policies, precious metals may remain attractive as safe havens — potentially supporting prices at higher levels.
Conversely, if inflation abates and financial markets stabilize, speculative demand could diminish and prompt further unwind in metals.
Technical Patterns vs. Fundamentals
Worth’s technical stance highlights an important market truth: price patterns often move faster than economic fundamentals. In markets with strong momentum traders and algorithmic strategies, technical signals can accelerate reversals beyond measured economic change.
Whether such technical shifts translate into sustained long-term trends will depend on macro stability, monetary policy clarity, and investor risk appetite moving into late 2026 and beyond.
Conclusion: Markets at a Crossroads
The recent surge — and partial cooling — in precious metals markets serves as both a reflection of deep macroeconomic uncertainty and a reminder of how investor psychology can shape asset prices. Analysts like Carter Worth are using technical ratios and price action to signal tactical opportunities, suggesting that gold may remain a safer harbor while silver corrects after an extraordinary run.
For investors, consumers and policymakers alike, the interplay of fundamentals, sentiment and technical market structures will continue to define what happens next in gold and silver — whether that’s continued strength, consolidation, or renewed volatility.
Precious Metals Price Snapshot (Late January 2026)
| Metal | Recent Peak (approx) | Primary Drivers |
|---|---|---|
| Gold | ~US$5,000+ per oz | Safe haven demand, central banks, inflation hedging |
| Silver | ~US$120+ per oz | Investment demand + industrial usage |