Gold and silver prices rebounded on Tuesday after a historic sell-off, with analysts saying the latest correction was more of a positioning reset than a sustained downturn.

Gold prices rebounded after falling on Monday before plunging nearly 10% on Friday, their biggest one-day drop in decades. Silver also recovered slightly after plunging about 30%, its worst one-day performance since 1980.

spot gold It rose 4% on Tuesday and was last up more than 2% at $4,771.76 an ounce. gold futures New York was last up 3%, hovering around $4,791.

spot silver On Tuesday, gold prices rose 7.8% and were last up 2.6% at $81.3 an ounce. Silver futures Futures in New York rose 7% to $82.67 an ounce.

The rebound comes as investors reassess whether the plunge signals a structural turn or is an overreaction to short-term catalysts.

Deutsche Bank strategists said history suggests this is a short-term catalyst, although the scale of the sell-off raises new questions about market positioning. The bank said that while signs of increased speculative activity had persisted for months, they were not sufficient on their own to explain the magnitude of last week’s volatility.

“Precious metals prices are correcting beyond the importance of their ostensible catalysts. Furthermore, the intentions of precious metals investors (official, institutional, individual) are unlikely to get worse.”

The sell-off was triggered by a combination of factors, including a rebound in the U.S. dollar, changing expectations surrounding the Fed’s leadership following President Donald Trump’s nomination of Kevin Warsh as the next Fed chair, and positioning adjustments ahead of the weekend.

Deutsche Bank said the broader investment case for gold and silver remains intact.

“The thematic drivers for gold remain positive and we believe investors’ rationale for allocation to gold (and precious metals) will not change. The current situation does not appear to be setting the stage for a sustained reversal in gold prices, and we draw some comparisons between today’s situation and the weak background of gold in the 1980s and 2013.”

Barclays struck a similar tone, acknowledging overheated technical conditions and tight positioning, but said broader gold “buying” could remain resilient amid geopolitical and policy uncertainty and reserve diversification themes.

Silver has been more volatile, reflecting its smaller market size, higher volatility, and higher retail participation. However, some analysts still maintain a bullish view on the white metal.

Zavier Wong, market analyst at eToro, said: “Speculative positions have definitely played a role in the short term. Silver attracts more retail participation than gold, which makes silver more sensitive to rapidly changing sentiments and short-term trading.”

However, Huang added that it might be “too simplistic” to attribute the entire move to speculation. Silver has real industrial demand, particularly related to data centers and artificial intelligence infrastructure.

A study published in January Global silver demand is expected to surge this decade, driven primarily by solar photovoltaics and the shift to silver-intensive battery technology. Total demand is expected to reach 48,000 to 54,000 tons per year by 2030, while supply is only expected to increase to about 34,000 tons, meaning that only 62%-70% of demand will be met.

The solar industry alone consumes 10,000-14,000 tons per year, accounting for 41% of global supply.

“This demand has not gone away. What we are seeing here is silver getting ahead of itself, which is what always happens with silver during its strong phases,” Huang said.