On Tuesday, gold traded in a narrow range, holding above $5,000, as investors assessed whether prices had bottomed after a historic sell-off. Although gold has pulled back about 10% since hitting a record high on January 29, it remains steadily higher for the year.

The precious-metals surge driven by speculative demand came to an abrupt halt in late January, when silver suffered its largest one-day drop on record and gold posted its biggest decline since 2013. However, many of the factors that have supported the multi-year rally—rising geopolitical risk, continued central-bank purchases, and low interest rates—are still in place.

UBS said recent volatility has led some to question gold’s value as a hedge against geopolitical and market turmoil. However, the bank believes those concerns are somewhat overdone and that gold’s uptrend will resume.

Many banks and asset managers, including Deutsche Bank and Goldman Sachs, also expect gold to recover. BNP Paribas said that with macroeconomic and geopolitical risks remaining elevated, gold could climb to $6,000 per ounce by year-end, and that the gold-to-silver ratio is likely to rise.

Gold’s outlook is also supported by ongoing central-bank buying. Poland announced last month that it would purchase an additional 150 tons after being the largest buyer last year, and China’s central bank extended its gold purchases into a fifteenth consecutive month in January. Inflows into gold ETFs have also remained stable, dipping only briefly during last week’s pullback before rebounding.

Meanwhile, driven by strong physical buying in Asia, silver has experienced extreme volatility in recent months. However, as metal supplies flow into Europe and Asia, the physical market is beginning to show signs of weakness.

Market Interpretation:

On the four-hour timeframe, gold is consolidating in a choppy range, with the MACD lines and histogram converging near the zero axis. In addition to persistent geopolitical risks, Warsh—Trump’s chosen Fed chair—advocates lower interest rates, which would support gold even if longer-term concerns about the U.S. dollar’s value ease somewhat.