Gold Near All-Time Highs Faces Pullback Risk as Silver Could Fall to $42, Analysts Warn of Illiquidity

In a climate of tightening macro liquidity and a surge in safe-haven assets, precious metals prices have rallied, drawing caution from traders monitoring crypto markets. Gold scaled fresh highs while silver extended gains, with analysts warning that year-end liquidity conditions could magnify volatility into the new year.

Capital Economics argues the move has stretched beyond fundamentals; they estimate silver could retreat toward around $42 by year-end next year as the gold frenzy cools. The report underscores that price action may not be fully explained by underlying drivers, a dynamic that may spill over into crypto sentiment.

UBS cautions that the rapid advance is largely the result of illiquidity, implying a swift reversal is plausible. Short-term risk in precious metals trading has risen as investors book profits near record highs, with end-of-year thin liquidity set to heighten price swings and complicate directional interpretation. Wang Yanqing of CITIC Futures adds that while longer-term drivers like de-dollarization persist, the recent surge may reflect speculative excess and could test market stability.