Despite a historic pullback in gold and silver prices, triggered by the sharpest two-session sell-off in decades, analysts see the metal's bull run continuing and expect it to notch fresh record highs later this year.

Spot gold prices plunged nearly 10% on January 30, its steepest fall since 1983, breaking below the historic $5,000 per ounce milestone scaled just days previously and wiping out much of the gains for the year. Silver fell 27% in the same session, its biggest downfall on record.

Gold fell more than 13% and silver nearly 34% over the last two trading sessions.

But analysts largely expect this to be temporary.

"Although the fall was large and fast, it should also be remembered that we are currently at the same levels we saw just three weeks ago," said Ross Norman, an independent analyst.

"This is a significant correction but it does not, by any stretch of the imagination, signify the bull run has ended."

AN OVEREXTENDED RALLY
Gold’s retreat follows what analysts say was an overextended rally, taking the metal from a record peak of $5 594.82 to around $4 700 - nearly $900 lower. It was sparked by US President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair, followed by CME Group's decision to raise margin requirements on precious metals futures.

The pullback could discourage speculative buying, analysts at WisdomTree noted, potentially creating space for long-term strategic buyers to re-allocate.

Gold prices could see a period of consolidation before moving higher over the next few weeks and months, said Tai Wong, an independent metals trader.

Markets also expect the Federal Reserve to trim interest rates two times this year, which will support non-yielding gold.

"We look for gold to reach a new record high above $6 200/oz later this year," said UBS analyst Giovanni Staunovo.

JP Morgan expects gold to reach $6 300/oz by year-end, the bank said on Monday, while Deutsche Bank reiterated its gold price forecast of $6 000 this year citing sustained investor demand.

However, some analysts caution that volatility may persist in the near term, warning that the sell-off may not be over yet.

"It is far too early to suggest gold has found a bottom yet," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

Expectations for silver remain mixed, reflecting its dual status as both a precious and industrial metal.