Textbook Correction in Precious Metals as Market Rallies into Easter

The rebound in gold seen this week has come as no surprise to long-term precious metal market observers, having followed a sharp sell-off into last Monday 23^rd March.

At the time, spot gold hit a cycle correction low just under USD $4,100 per troy ounce (oz) before rebounding to its current price—at the time of writing USD $4,757oz, representing a gain of 16% in just over a week.

From a technical perspective, the market had become materially stretched below the 50-, 20- and 10-day simple moving averages as of early last week, creating conditions for the reflexive bounce we have seen. Price action also saw an intraday wick down just above the 200-day moving average, which acted as a key support zone for prices.

This type of short-term price action is entirely consistent with what we tend to observe during strong secular bull markets. This is defined by sharp, sentiment-driven corrections followed by equally sharp—if not stronger—recoveries, as underlying fundamentals reassert themselves.

In that sense, as always, it pays to focus on the medium- to long-term outlook, with the macroeconomic and geopolitical fundamentals that have underpinned the long-term bull market remaining firmly intact.

Ongoing tensions in the Middle East, particularly surrounding Iran, continue to underpin safe-haven demand—while inflation dynamics continue to worsen as the economic burden of persistently elevated oil prices (currently trading around USD $103/bll), ripples through the global economy.

That said, it is still too early to definitively conclude whether the recent pullback has fully run its course, or whether there is further downside consolidation ahead before the next leg higher.

The key question for markets in the near term is whether gold can sustainably reclaim the USD $5,000oz level, or if additional time is required for prices to consolidate following the exceptionally overextended rally which played out into January this year.

Historically speaking, periods following such extreme deviations from long-term averages tend to mean-revert back towards and even below historical averages over time. Importantly, large pullbacks of this nature are not only normal but necessary within the context of a healthy secular bull market.

To that end, it was noteworthy that March 2026 was the worst month for gold (-11%) in USD terms since October 2008.

October 2008 was of course characterised by extreme volatility, forced liquidation, and widespread uncertainty at the height of the Global Financial Crisis.

Looking back at that period provides a useful framework for contextualising the current environment.

Over October and December 2008, gold fell from highs of USD $900oz to lows of $712oz, a drop of 21%. This initial phase reflected a period where liquidity was paramount—driving indiscriminate selling across asset classes, with even gold sold to meet margin calls and raise cash.

More notably, the period from December 2008 through to December 2011 marked one of the most powerful bull runs in precious metals history. Gold advanced from USD $865oz to $1,574oz (an 82% increase) with a high that topped USD $1,900oz in September of that year.

This move was underpinned by a combination of quantitative easing, negative real interest rates in the U.S. and a structural shift in investor behaviour toward hard assets.

Extrapolating this framework to the current precious metals bull market suggests that while volatility is likely to remain elevated, the medium to long-term outlook for precious metals remains highly constructive.

Thank you for choosing ABC Bullion

Jordan Eliseo
General Manager, ABC Bullion

Luke Tyler
Market and Business Analyst, ABC Bullion

^{Disclaimer: This document has been prepared by Australian Bullion Company (NSW) Pty Limited (ABN 82 002 858 602) (ABC). The information contained in this document or internet related link (collectively, Document) is of a general nature and is provided for information purposes only. It is not intended to constitute advice, nor to influence any person in making a decision in relation to any precious metal or related product. To the extent that any advice is provided in this Document, it is general advice only and has been prepared without taking into account your objectives, financial situation or needs (your Personal Circumstances). Before acting on any such general advice, we recommend that you obtain professional advice and consider the appropriateness of the advice having regard to your Personal Circumstances. If the advice relates to the acquisition, or possible acquisition of any precious metal or related product, you should obtain independent professional advice before making any decision about whether to acquire it. Although the information and opinions contained in this document are based on sources, we believe to be reliable, to the extent permitted by law, ABC and its associated entities do not warrant, represent or guarantee, expressly or impliedly, that the information contained in this document is accurate, complete, reliable or current. The information is subject to change without notice, and we are under no obligation to update it. Past performance is not a reliable indicator of future performance. If you intend to rely on the information, you should independently verify and assess the accuracy and completeness and obtain professional advice regarding its suitability for your Personal Circumstances. To the extent possible, ABC, its associated entities, and any of its or their officers, employees and agents accepts no liability for any loss or damage relating to any use or reliance on the information in this document. It is intended for the use of ABC clients and may not be distributed or reproduced without consent. © Australian Bullion Company (NSW) Pty Limited 2020.}