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The gold and silver markets recorded a sharp correction, with prices falling for the second session in a row. Commodity-based ETFs fell as much as 4%.
The sharp decline wiped out an estimated $1.28 trillion in combined market capitalization, reflecting that even traditional safe-haven assets remain vulnerable to economic shocks and liquidity shifts.
Lunar Year Liquidity and Economic Pressures Fuel a Correction in Gold and Silver Prices
The decline came later Strong rise Early 2026 pushed gold to over $5,000 an ounce and silver hit record highs.
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Analysts say the decline reflects a combination of seasonal factors, general economic pressures and profits after a long rally.
Silver was hit particularly hard, falling almost 40% from its all-time high (ATH) of $121,646 set in late January.
At the time of writing, silver (XAG) is trading at $74.11, reinforcing its reputation as a more volatile asset compared to gold, given its small market size and growing industrial demand.
An analyst, emphasizing the speed of the decline and the risks of assuming stability in each asset class, wrote that today gold and silver lost $ 1.28 trillion … even the “safe havens” are bleeding.
Others pointed to the role of market structure and liquidity, emphasizing that temporary disruptions can occur when major physical markets slow down, Especially in Asia.
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Liquidity effects during the Lunar New Year come to the fore
In view of this landscape, one of the most cited short-term drivers is the Lunar Year holiday period, during which business activity in the main financial centers of Asia decreases dramatically.
Mainland China, Hong Kong, Singapore, Taiwan and South Korea are all seeing a decline in participation as traders, manufacturers and market makers move away.
Low liquidity can amplify price movements in global futures markets, especially for commodities such as silver, where current demand from Chinese industry plays a key role.
Falling demand during the holiday period has the potential to temporarily pressure prices, with physical buying potentially picking up once factories and stock markets return to full activity.
Analysts warn of continued volatility as the general pressure on gold continues
Going beyond seasonal factors, broader macroeconomic developments also contributed to the decline. Precious metals came under pressure as investors focused on narratives that would strengthen the US dollar in the short term. These include:
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A stronger dollar typically puts pressure on gold and silver prices by making them more expensive in other currencies, reducing demand from international buyers.
ETF flows reflect the cautious mood. Several gold and silver ETFs saw declines between 2% and 4%. This reflects weakness in the futures markets and indicates that some investors are taking profits after the recent rally.
Market strategists have stated that precious metals are now in a “volatile build-up phase”. After this strong advance, corrections and sideways trading are common as markets attempt to digest gains and rebalance positions.
Adopt a disciplined approach, rather than chasing prices at high levels; Instead, consider buying gradually during corrections.
Technical analysis also showed key support levels, with silver price support estimated near $65.00 per troy ounce and gold support near $4,770.00 per ounce on a weekly closing basis.
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These levels are likely to determine whether the current declines will stabilize or deepen, and investors should do their own research.
Despite the steep decline, structural forces, such as rising global debt, currency erosion, and historical cycles in ratios, such as the gold-silver ratio, can contribute to sustaining a strong long-term bull market for precious metals.
If historical ratio reversals are repeated, silver could see a major rally in the next decade, possibly reaching very high price levels in the early 2030s.
