In late Jan 2026, #GOLD soared past $5,600/oz and #Silver hit over $120/oz - fueled by geopolitical tensions, a weaker U.S dollar , demand, and speculative buying ( due to tarrif fears and Fed uncertainty).
Then prices crashed in early Feb 2026, reflecting extreme volatility in leveraged contracts.
Why the plunge? The trigger was the nomination of #KevinWarshNextFedChair as markets saw this as signaling fewer aggressive rate cuts , strengthening the dollar and hurting non-yielding metals.
However, major factors at play included:
Strong Dollar and Rates: A rebounding USD hurts metals , as they are priced in dollars.
Speculative Overload: Futures open interest dropped sharply post crash , signaling reduced leverage.
Supply Demand Dynamics : Gold benefits from central bank hoarding , while silvers industrial use adds upside but vulnerability to economic slowdowns.
Global Risks: Trade wars and conflicts, etcetera.
Short-term Outlook:
Expect continued swings ad recent rebounds show dip- buying but volatility persists from Fed news and margin effects. Gold may stabilize $ 4800- $5100 & Silver $80- $90 but more downside risk if dollar firms.
Long-term Outlook:
Bullish fundamentals remain fueled by drivers like central bank buying, de-dollarization, debt concerns and silvers supply deficits. So, Analysts eye $XAU towards $5,000-$ 6,000 and $XAG $100-$150 by year end.
Bottom line: This dip offers a rest , not an end. Precious metals remain a hedge in uncertain times. Let watch the space👀#DYOR
