Gold and silver prices may crash soon, a wealth manager says

Gold and silver may be heading for a sharp correction after their record-breaking rally, according to Amit Goel, Co-founder and Chief Global Strategist at PACE 360, a New Delhi-based firm with over $2.4 billion worth of assets under management.

Goel cautioned that the recent surge in precious metals has all the signs of a “reflationary bubble of gigantic proportions,” and investors should brace for significant downside in the coming months.

Gold prices have hit multiple all-time highs this year, currently hovering near the $4,000 mark, while silver has approached the $50 level.

“It’s the wildest party we’ve seen in precious metals in a very long time,” Goel said in an interview with CNBC-TV18. “In the last 40 years, there have been only two such episodes where gold and silver did extremely well, and the dollar index was either soft or going down. In both those instances, gold and silver corrected a lot after that.”

Goel believes these key psychological landmarks could mark the final leg of the rally. “I believe there’s a high probability that both those landmarks will be achieved within the next few days or maybe a couple of weeks,” he said, adding that what follows could be an aggressive wave of selling.

“In this case, you can expect a 30–35% correction in gold,” Goel warned, citing similar episodes in 2007–08 and 2011 when gold prices fell as much as 45% after major rallies. “I think it’ll probably be about a year or so of correction. I expect about a 35% correction in gold and nothing less than 50% in silver from the top, because that’s where the biggest madness lies right now.”

The strategist sees gold falling to around $2,600–$2,700 levels before it becomes attractive again. “At that level, gold will again be the best investment in the world,” he said. However, he struck a more cautious tone on silver, warning that its long-term prospects could weaken as a global slowdown unfolds.

“I’m seeing a profound recession in the world led by the US over the next two to three years. In that case, the demand for silver, for the first time in a decade, is actually going to go down,” Goel said, adding that even industrial demand from sectors like photovoltaics, semiconductors, and electric vehicles may not offset the impact of an economic contraction.

While short-term rallies may continue, Goel believes the current uptrend in precious metals is unsustainable. “A regime change has to happen,” he said, reiterating his view that investors should prepare for a deep correction before gold once again emerges as a compelling long-term buy.

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