Happy Thursday, GoldBuzzers!

How are you enjoying the rollercoaster ride?

After our historic 9-week relentless upwards rally, gold and silver finally took a break, but the volatility took a lot of new investors by surprise. In today’s Real Talk, I’ll take a closer look at what’s going on.

OK, let’s dive in.

Gold prices extended their correction on Wednesday, falling 0.6% to $4,097 per ounce as profit-taking continued following Monday's record high of $4,380. Tuesday's 5.4% plunge marked gold's steepest single-day decline since 2013, with mining equities taking an even harder hit as the VanEck Gold Miners ETFs tumbled into double-digit losses.

While the Trump-Xi summit planned for late October in South Korea remains on track despite escalating trade tensions over rare earth minerals, the postponement of the Trump-Putin Budapest summit after Moscow rejected Ukraine ceasefire proposals has kept geopolitical uncertainties elevated.

Despite the recent pullback, gold remains the stellar performer of 2025, up approximately 57% year-to-date, supported by the Federal Reserve's September rate cut and market expectations for two additional quarter-point cuts by year-end.

Gold crashed hard last Friday, and again on Tuesday. Silver followed. Investors panicked.

The numbers tell the story. Gold fell 6.3% to $4,082 per ounce, marking its steepest decline since April 2013. Silver dropped 8.7% to $47.89, its sharpest fall since February 2021.

But what the panic merchants won't tell you is this looks exactly like what healthy bull markets do.

Gold had just hit an all-time high of $4,398 per ounce on October 20. Silver had been on an absolute tear, rising over 70% year-on-year in 2025. Nine-month gains reached 61%.

Markets don't move in straight lines. When they try to, they break.

Saxo Bank's commodity strategy head pointed out that gold could handle a 10% correction to $3,973 without compromising its bullish trajectory. We're not even there yet.

The fundamentals driving precious metals haven't changed. Central banks keep buying. Inflation pressures persist. Fiat currency concerns remain real.

The Theseus research project, which I conducted from 2020-2024, analysed precious metals prices back to 1970. One of the most striking insights was the prevalence of extremely consistent and significant drawdowns.

The graph below shows Silver market drawdowns (in blue) with a buy and hold approach, compared with the Theseus system designed to optimise returns (in orange).

Buy and Hold can be very rocky in any market over the long term, but especially in Gold and Silver, and while the long term returns are still spectacular, you would have endured a maximum drawdown of 92% (average 67.8%) in the Silver market on your way to multiplying your capital 5.5 times.

In comparison, the system designed to maximise returns endured a worst drawdown of only 32% (average 9.7%) and multiplied gains by over 20 times.

The moral of this story is that you must have a systematic approach, otherwise you have to be prepared to weather very significant drawdowns.

For amateur traders, a very simple (but effective) filter is using the 200 day moving average and only stay long when price is above it. You can also add a further requirement that the moving average must be trending upwards.

Long-term projections remain aggressively bullish. Analysts see gold reaching $6,500 by 2027, potentially $10,000 by 2030.

TD Securities sees potential for $6,000-$7,000 if China accelerates its accumulation strategy. That's 50-70% upside from current levels.

These forecasts haven't budged despite last week's selloff. The bull thesis remains intact.

The silver story gets more interesting under the surface. The metal faces its fifth consecutive year of supply deficit. Demand is projected to outstrip supply by more than 100 million ounces in 2025.

Industrial consumption sits above 700 million ounces, driven by solar panels, electric vehicles, and electronics. This isn't speculative demand. It's structural.

If $50 per ounce holds as support instead of resistance? That changes the game completely. A 45-year ceiling becoming a floor changes everything.

Look at what actually happened here. Traders positioned ahead of U.S. CPI data. Overbought conditions got stretched. Something had to give.

Historical patterns show early corrections in major gold bull markets typically range from 11-15%. The 1972 correction saw a 13% decline. These corrections usually last between four to five months based on patterns from 1972 and 2005 breakouts.

We're watching normal bull market behavior play out in real time.

Meanwhile, central banks keep stacking. The World Gold Council's 2025 survey shows 95% of central bankers forecast global gold reserves to grow this year. Forty-three percent plan to increase their own holdings.

Central banks have accumulated over 1,000 tonnes of gold in each of the last three years. That's up significantly from the 400-500 tonne average over the preceding decade.

When the institutions that manage national reserves keep buying, that signal matters more than a week of price action.

Here's the uncomfortable truth about human psychology. A 6% loss hurts about twice as much as a 6% gain feels good.

Behavioral economists call it loss aversion. Your brain treats losses and gains asymmetrically. Watching your position drop 6% in a day triggers genuine pain responses, even if you're still up 50% on the year.

Bull markets don't move in straight lines, but our emotions expect them to. After silver climbed 70% year-on-year, a sharp pullback feels like betrayal rather than normal market behavior.

The hardest part of riding bull markets isn't identifying them. It's staying in the saddle when they buck.

Every correction becomes a crisis in your head. Every pullback whispers that you should have sold at the top. The emotional weight of a 10% drop can completely overshadow the 60% gain that preceded it.

This asymmetry in how we process gains versus losses? It's why most people underperform. They bail during corrections that feel catastrophic but are actually routine.

Central banks? They don't have this problem. No one's checking prices every hour. No emotional whiplash from red numbers. Just steady accumulation.

Corrections shake out weak hands. They reset overbought conditions. They create stronger foundations for the next move up.

Most analysts see this pullback the same way: better entry points before the next leg up.

Fundamentals haven't changed. Technicals show normal consolidation. Institutions keep buying.

Gold and silver crashed hard last week. Bull markets always do this. They test your conviction first, then reward it later.

That’s a Thursday wrap, folks. I’ll see you on Sunday for the weekend update.

Before you go, please take a moment to rate todays’ newsletter and let us know how we did.

Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com