MW Gold now down nearly $1,000 from peak as silver struggles following record 31% slump
By Barbara Kollmeyer
Deutsche Bank is sticking to its $6,000 gold forecast
People queue inside a gold dealer in Hong Kong on January 28, 2026. A rapid rally for gold and silver continued to unwind on Monday.
A volatile day was setting up for precious and base metals, with pressure focused on silver astraders watched China markets for signals of a deeper rout.
The most-active March silver contract (SIH26) (SI00) dropped over 5% at one point in early trading before recovering to $78.79 an ounce. Friday's slump of 31% to $78.53 an ounce on Comex marked its biggest one-day percentage drop since March 27, 1980, according to Dow Jones Market Data.
Read: Silver suffers biggest drop in 46 years, with 'every man and his dog rushing for the exit'
Gold for April delivery (GCJ26) pulled back from a 4% drop to slip nearly 2% at $4,659 an ounce, after settling 11% lower at $4,745.10 an ounce on Friday. Last Thursday, gold futures on a continuous basis (GC00) tapped an intraday high of $5,626.80 an ounce. Gold is now down $961 from that intraday high.
Elsewhere, copper for March delivery (HGH26) (HG00) fell close to 3% to $5.749 a pound, after a 4.5% drop on Friday. Platinum futures (PL00) fell 4% to $2,023 an ounce after a 19% slump on Friday, and palladium (PA00) was down 5% at $1,616 an ounce, after a respective 16% tumble.
Traders continue to unwind what had become "an extremely crowded, one-sided trade," Ole Hansen, head of commodity at Saxo Bank, in a Monday post on X.
"Silver in particular had, for months, drawn in investors, professionals, and retail participants alike, before the move turned parabolic and increasingly unhinged," said Hansen, who added that too many traders and investors then tried to exit at once on Friday.
The initial trigger for that selloff was a dollar DXY rebound surrounding President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair. However, the "depth of the slump was driven by a cascade of futures selling linked to the unwinding of ETF and options positions," said Hansen.
"The risk of second- and third-round selling remains elevated, particularly with Shanghai - the main engine of recent support - selling sharp losses," he said.
Most commodity futures in Shanghai opened to sharp losses on Monday.
Bloomberg reported on Monday that Chinese metals traders were facing losses of at least 1 billion yuan ($144 million) after a metals dealer Xu Maohua, known as "The Hat," fled the country leaving deals hanging.
Citing sources, the report said among those doing business with him was state-backed investment holding company SDIC Commodities Co. Losses triggered by Xu have sparked China's state-owned regulator to order big commodities traders to review operations, the report said.
Calling for calm was Michael Hsueh, analyst at Deutsche Bank, who said the bank was sticking to its end-2006 target of $6,000 an ounce, which it boosted two days before gold's intraday peak on Thursday.
"Gold's thematic drivers remain positive and we believe investors' rationale for gold (and precious) allocations will not have changed. The conditions do not appear primed for a sustained reversal in gold prices," said Hsueh.
Hsueh said China gold ETF holdings could see a new record in 2026, and signals that that country has been a "prominent driver of precious metals investment flows," suggest the rationale for a positive outlook on the commodity hasn't changed.
-Barbara Kollmeyer
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(END) Dow Jones Newswires
February 02, 2026 03:59 ET (08:59 GMT)
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