On February 7, following a week of dramatic wide-ranging fluctuations, the precious metals market finally showed signs of stabilization during the Asian trading session on Friday. According to analysis, although gold and silver have steadied and begun to recover, supported by buying at lower price levels, the overall trend for the week has weakened significantly. Silver, in particular, after erasing its earlier gains, still maintains a weekly decline of approximately 14%. This pullback, driven by a reduction in safe-haven demand and a strengthening US dollar, is compelling the market to reassess the medium-term pricing logic for precious metals.
As geopolitical tensions ease, the appeal of gold as a safe-haven asset has diminished in the short term. Data shows that although spot gold briefly fell below the psychological $5,000 mark this week, dropping to around $4,825.31, its performance has remained stronger than other metal varieties. The relative resilience of the gold market is attributed to its superior liquidity and a relatively rational distribution of market positions. In contrast, other precious metals like platinum also experienced significant declines of nearly 10% this week, indicating broad-based pressure on the sector due to the strong US dollar.
The market is currently highly focused on the potential impact of changes in Federal Reserve leadership on monetary policy. Some analysis suggests that due to the hawkish stance of the nominee for the next Fed Chair, the US dollar index is recording its largest weekly gain since last October, which continues to exert marginal pressure on dollar-denominated metal prices. Analysis indicates that silver has entered a critical base-building phase within the $70 to $90 range. If prices can find effective support in this zone, bullish sentiment could potentially regroup in the future. Conversely, if this support level fails, the market may need to seek deeper support around the $58 to $60 range.
Given the current highly volatile market environment, maintaining rational risk control is particularly important. Investors are advised to closely monitor the trajectory of the US dollar and further developments in geopolitics, to reasonably capture trading opportunities during oversold rebounds, while also guarding against potential secondary impacts from shifts in macroeconomic policy.
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