Gold prices face short-term pressure but still have the chance to reach $5,000, as easing geopolitical tensions change market sentiment

The precious metals market has recently experienced a significant correction. After several weeks of continuous gains, metals such as gold and silver are beginning to take profits. At the same time, as the geopolitical situation in the Middle East eases, the geopolitical premium that once supported the rise of precious metals is also diminishing. However, this short-term adjustment does not seem to change analysts’ views on the long-term trend.

Three Signals of the Easing Geopolitical Premium

According to the latest news, Marex analyst Edward Meir pointed out that the main reasons for the loss of some geopolitical premium in precious metals include:

• The protests in Iran have subsided, and the situation is stabilizing
• U.S. President Trump is adopting a wait-and-see attitude and has not taken aggressive actions
• Russian President Putin is intervening to mediate, easing tensions

These factors combined have led to a relaxation of the Middle East geopolitical tensions, and the risk premiums that once pushed up gold and silver prices have weakened accordingly.

Short-term Correction Coexists with Long-term Opportunities

Meir stated that the current correction in precious metals is a normal market adjustment. After several weeks of sharp increases, profit-taking is an expected phenomenon. Silver is more noticeably affected by the fading geopolitical premium because its industrial properties make it more sensitive to risk sentiment.

However, he also emphasized that this short-term adjustment does not mean the upward trend of precious metals has ended. Meir still believes that gold has the opportunity to reach a target price of $5000 at some point this year, though it will be accompanied by significant pullbacks during the period.

How to Understand This Contradictory Expectation

This view of short-term pressure but long-term optimism reflects the market’s complexity. The fading of geopolitical premiums is only a short-term negative factor, but the factors supporting long-term gold price increases—such as ongoing central bank gold purchases, long-term geopolitical risks, and real interest rates—still exist. Therefore, the current correction is more of a “cooling-off period” rather than a trend reversal.

Investors need to understand that, from the perspective of the $5000 long-term target, the current short-term volatility is just a normal adjustment in the process of reaching that goal.

Summary

Precious metals face dual pressures in the short term: profit-taking and the fading of geopolitical premiums. However, this does not change analysts’ optimistic outlook on the long-term trend. The easing of geopolitical tensions is the main driver of this round of correction, rather than a deterioration of fundamentals. From the long-term target of $5000, the current adjustment is part of normal fluctuations rather than a trend reversal, and investors should be prepared for significant pullbacks during this period.