The gold price surpassed $5500 before experiencing a "flash crash"? Silver surged 65% in a single month only to plummet again: Is this a pullback offering a buying opportunity, or are investors being left holding the bag at the peak? Tonight! The US is set to announce the new Federal Reserve Chair. Was the recent sharp sell-off triggered by the unexpected emergence of a "hawkish" candidate for Fed Chair? Stay tuned tonight for the answer. On the evening of January 29th, Trump stated he would announce the new Federal Reserve Chair on the evening of January 30th, Beijing time. Surprisingly, the previously favored dovish candidate might be out, replaced by a prominent hawkish (monetary tightening) figure, Federal Reserve Governor Kevin Warsh!! Personal Ties and Interest Links: Father-in-Law Benefactor + Policy Advisor Warsh's father-in-law is billionaire Ronald Lauder, a classmate of Trump's at the Wharton School, who has long provided political funding support to Trump. This "nepotistic connection" served as a key bridge for their early trust-building and gave Warsh inherent favor within Trump's circle. An "Insider" on the Transition Team: Warsh provided economic policy advice for Trump's 2016 presidential transition team, embedding himself early in Trump's core decision-making circle. He is seen as a reliable choice who "understands economics and is compliant," contrasting with more "independent" officials like Powell. During his first term, Trump interviewed Warsh for the Fed Chair position but ultimately chose Powell. This "missed opportunity" became a significant point in their relationship; Trump later publicly expressed regret over this choice, laying the groundwork for a potential 2026 nomination.
Faced with this sharp correction in precious metals, should investors panic and flee, or search for gold amidst the ashes? Analysts generally believe the previous rally was irrational, suggesting the current decline could be painful. I. Why Did the "Crazy Rally" Suddenly Cool Off? This pullback is not accidental but the result of multiple forces converging: Profit-Taking to Quench Thirst: Gold rose 30% in less than a month at the start of 2026, while silver surged 65%! With such substantial paper gains, it's inevitable for major funds to take profits off the table. Exchange "Pulling the Plug": The CME (Chicago Mercantile Exchange) recently raised margin requirements consecutively, effectively pouring cold water on heated speculative leverage and forcing some highly leveraged players to exit. The Fed's "Hawkish Shadow": Despite the long-term trend of de-dollarization, Powell struck a more hawkish tone than expected in the recent FOMC meeting. The rebound in the US Dollar Index directly exerted technical pressure on precious metals. II. Three Actions for Retail Investors During the Pullback Blindly reacting to the red numbers (or sharp decline) on the screen is the beginning of losses. Here is a "pitfall avoidance guide": 1. Re-examine Your "Gold-Silver Ratio" The gold-silver ratio has compressed from its long-term average near 80 to 50 or even lower. This indicates one fact: silver's volatility far exceeds that of gold. Strategy: If you seek stability, gold finding support near $5,000 - $5,100 is a solid level; if you seek explosive potential, silver has strong psychological support around the $100 round number. 2. Reject "Going All-In," Adopt Dollar-Cost Averaging (DCA) No one can precisely time the bottom during a bull market correction. Action: Divide the capital planned for entry into 4-5 portions. Use every 3% - 5% decline as an entry point. This method effectively averages down the cost and alleviates the psychological pressure of "buying just before a drop." 3. Check Your Holding's Nature: Speculation or Allocation? Short-term Speculation: If key technical levels are broken (like gold's 20-day moving average), cut losses to preserve capital. Long-term Allocation: The backdrop for precious metals in 2026 remains global debt levels and geopolitical uncertainty. As long as the fundamentals haven't changed, short-term price fluctuations are merely a "technical correction" within a bull market. III. Outlook for 2026: Is This Just an "Intermission"? Predictions from major Wall Street banks remain aggressive: Citi and UBS: Maintain a 2026 year-end gold target price of $6,000. Silver's "Industrial Logic": With the explosion in demand from photovoltaics and new semiconductors in 2026, silver's structural supply deficit has entered its fifth year. As the saying goes: "Silver is gold with leverage." While there might be some medium-to-long-term support, after such an irrational rally, the correction is likely to be significant. It's not advisable to bottom-fish now. Summary: Corrections act as a market filter, sifting out impatient speculators and leaving behind clear-headed investors positioning for the long term. IV. Final Thoughts Observing futures market positioning, this decline occurred on the penultimate day of January—the perfect January squeeze has concluded! But what about February or March? Infinite dollars chasing finite commodities—the squeeze might still be on the horizon.
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