The day marked the first day of the Lunar New Year, with many major global markets closed for the traditional holiday, resulting in thin overall trading in the precious metals market. Against this backdrop, expectations of a Federal Reserve rate cut cooled somewhat, while gold had been under persistent pressure near the key psychological level of $5,000 per ounce. Profit-taking by some investors further amplified downward pressure on gold and silver prices.

 

In fact, this decline was not an isolated event. Since the start of 2026, the precious metals market has seen extremely volatile moves. In late January, speculative buying pushed silver to a record high of $121.44 per ounce, while gold also surged above $5,595 per ounce. However, starting from January 30, gold and silver prices have been in a roller-coaster pattern of repeated sharp falls and rebounds. On February 5, spot silver plunged 15% in a single day; on February 12, it tumbled more than 10% again. Before this latest drop, spot gold still retained a gain of around 15% year-to-date, while silver’s cumulative increase of over 50% early in the year had narrowed sharply.

 

The significant divergence between gold and silver is closely related to differences in their investment characteristics. Gold mainly acts as a safe-haven asset with relatively mild price swings; silver, meanwhile, has both financial and industrial attributes, with a higher share of industrial demand, a smaller market size, and lower liquidity, so it tends to face heavier selling pressure during corrections.

 

Notably, in early February, Guotou Ruiyang Silver LOF saw its net asset value plummet 31.5% in one day due to a change in valuation methodology, sparking widespread controversy among investors. On February 15, Guotou Ruiyang Fund officially announced a settlement plan, fully compensating individual investors whose losses from the valuation adjustment were below ¥1,000 — a group that accounted for more than 90% of that day’s redeemers. The incident highlights the unique risks faced by related financial products amid high volatility in precious metals.

 

Guosheng Securities noted in a recent research report: “Wash supports the policy combination of ‘parallel rate cuts and balance sheet reduction’. The logic is to control inflation by shrinking the balance sheet, creating conditions for lower nominal interest rates. But rate cuts aim to boost market liquidity and stimulate economic growth, while balance sheet reduction withdraws liquidity and curbs inflation by shrinking the Fed’s balance sheet. The two operate in opposite directions, which may offset policy effects and cause market confusion over policy intentions.”

 

Disclaimer: The market is subject to risks, and investment involves caution. This article is generated by AI based on third-party data, for reference only, and does not constitute personal investment advice.