On the morning of November 2, 2026, domestic precious metals futures opened higher before fluctuating and pulling back, with the main Shanghai Silver contract plunging nearly 5%, while Shanghai Gold fell nearly 3%, maintaining an overall weak trend. According to multiple institutions, the core reason behind the recent sharp correction in Shanghai Silver futures prices lies in the strong resonance between macro tightening expectations and market liquidity shocks, as well as silver's own relatively weak supply-demand fundamentals. On one hand, strong US economic data and sticky inflation have raised expectations for a Fed rate hike in December, while escalating geopolitical conflicts in the Middle East have kept oil prices at elevated levels, which in turn reinforced inflation and tightening expectations, severely suppressing the safe-haven attributes of precious metals. On the other hand, a sharp selloff in US tech stocks triggered concerns about AI returns, and tightening liquidity forced institutions to sell precious metals and other risk assets to cover margin calls, triggering programmatic stop-losses on long positions. Additionally, silver came under dual pressure from slowing industrial photovoltaic demand and rising visible inventories, making capital selling pressure even heavier, with losses significantly larger than gold, showing a breakdown pattern on the charts.
Hawkish Expectations and Geopolitical Inflation Resonance: Tightening Logic Suppresses Safe-Haven Attributes
The primary pressure facing the precious metals market currently comes from the Federal Reserve's tightening policy expectations. Everbright Futures noted: "The Fed paused rate hikes, but its hawkish stance remains unchanged. The Fed's October meeting kept rates at 3.75%-4.00%, and the vote result continued to show internal divisions within the Fed... The market immediately priced in another possible rate hike at the December meeting, with nominal and real rates rising, increasing the cost of holding gold." GF Futures also stated: "Currently, precious metals are mainly suppressed by the high-level operation of dollar assets including US Treasury yields brought about by strong US economic data, and the Fed's December rate hike expectations." It is worth noting that the ongoing turmoil in the Middle East has not effectively stimulated safe-haven buying, but instead became a driver of tightening expectations. Everbright Futures analyzed: "The 'Middle East geopolitics-oil prices-inflation' chain continues and is intensifying. The Strait of Hormuz restrictions, escalation in the Bab-el-Mandeb Strait and Red Sea, attacks on Saudi oil pipelines, the deadlock in US-Iran negotiations, and ongoing Houthi-Saudi conflicts are all pushing up market inflation expectations, which in turn reinforce tightening expectations." GF Futures summarized: "Geopolitical conflicts pushing up oil prices actually strengthen tightening expectations through the inflation channel, and the safe-haven function of precious metals has failed under the squeeze of the dollar and US Treasuries."
Tech Stock Selloff Triggers Liquidity Shock: Longs Exiting Amplifies Market Decline
Beyond macro interest rate pressure, tightening liquidity in financial markets further intensified selling pressure on precious metals. Everbright Futures pointed out: "Liquidity selling has reappeared. The sharp selloff in US tech stocks (Intel's guidance miss, Amazon's surging capital expenditure) triggered concerns about AI returns, and institutions were forced to sell other risk assets to cover margin calls. From a historical comparison, gold is also easily a target for selling." Hongyuan Futures also observed this phenomenon: "Some US tech companies saw increased capital expenditure but negative cash flow in Q3 2026, triggering investor concerns about future AI financing scale, costs, and return cycles; the US Treasury's General Account cash balance rose above $1 trillion, causing financial market liquidity to tighten; the above factors may keep precious metals prices oscillating and weak." In this highly uncertain environment, long-position funds chose to retreat for safety. Chuangyuan Futures stated: "The US and Iran may clash again after the US midterm elections, crude oil rises, global risk assets pull back, and liquidity faces another shock." Everbright Futures believes: "Longs are exiting based on uncertain factors. Gold prices lack upward momentum, breaking below integer levels triggers programmatic stop-losses, amplifying the decline."
Dual Pressure from Industrial and Financial Attributes: Silver Fundamentals Far from Optimistic
While silver followed gold's decline, its own weak industrial attributes also led to weaker performance. GF Futures provided an in-depth analysis of silver's fundamental situation: "With silver's rigid industrial photovoltaic demand slowing, investment demand is also not optimistic, specifically reflected in the continuous increase of visible inventories both domestically and internationally. Financial and industrial attributes form a dual suppression, speculative shorts are adding positions, and silver will continue to be weak going forward." Regarding the reason why silver's decline exceeded expectations, Everbright Futures explained: "Silver, platinum, and palladium are increasingly correlated with gold, which means that in a situation where gold keeps falling, silver, platinum, and palladium find it even harder to withstand capital selling pressure, with declines far exceeding gold."
Midterm Elections Become Market Focus
Looking ahead, major institutions generally view the upcoming US midterm elections and the subsequent Federal Reserve monetary policy path as key anchors for market evolution. Chuangyuan Futures stated: "In the short term, the above short-term bearish factors still exist... At the same time, the technical side has experienced a breakout, and short-term weakness may continue, requiring patience while waiting for a bottom to form. The medium-to-long-term view remains unchanged from before. This week, focus on US employment data and PMI-related data." GF Futures recommended: "By year-end, under the bearish pressure of high US growth, high inflation, and high interest rates, precious metals will continue to maintain weak oscillation, waiting for the impact of geopolitical developments on energy supply after the US midterm elections." Everbright Futures believes the current situation is "a concentrated clearing of stop-loss orders, not a complete reversal of fundamental trends," and noted: "There is a possibility of a rebound in November, with the core anchored to two main themes: the midterm elections and the December rate path... The rebound window is concentrated in the data observation period from the election outcome to before the December FOMC meeting, and it is necessary to continuously track the extent to which inflation and employment data revise rate pricing." It also reminded silver investors: "Similarly, if gold presents a rebound opportunity in November, silver, platinum, and palladium prices will also see some recovery. Pay attention to changes in market sentiment."
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