Guest Speaker:
Mingzhe Gu : A professional trader with 15 years of experience in equities and international futures. He serves as a guest lecturer for several major global exchanges, including the Chicago Mercantile Exchange (CME), and is also the founder of Win-at-the-Start Investment Academy. He is currently the General Manager of Shanghai Qigu Information Technology.
As an active Chinese presence on international futures platforms, in 2021 he once again emerged as a leading competitor in a live trading competition’s overseas-markets division, taking multiple awards with ease: 7th place in the Global Heavyweight Group, 1st prize in CME COMEX Copper Options, 1st prize in 10-Year U.S. Treasury Options, and 2nd prize in NYMEX WTI Crude Oil Options.
Yesterday, Master Gu reviewed the major global macro assets in January 2026, focusing on gold, silver, and U.S. equity indices. Against the backdrop of ongoing geopolitical headlines—such as the renewed U.S. government shutdown risk and the Iran situation—he laid out both his trading framework and his forward-looking market calls. $黄金主连 2604(GCmain)$ $微黄金主连 2604(MGCmain)$
Before getting into each market, let’s start with the big headline that just hit today: gold sold off sharply. And importantly, Master Gu had already flagged the conditions for this kind of move yesterday.
On precious metals, here’s how I would summarize his logic:
“After a fast run-up in gold and silver—with volatility and speculation reaching elevated levels—he emphasized that the January–February window could be a key timeframe for a major or medium-term top. He specifically highlighted late January to early February as a potential ‘high-volatility / inflection’ window. The trigger for a pullback, in his view, is that the market may have priced in ‘too much’ risk premium; once risk events ease (for example, if shutdown fears fade or geopolitical tensions de-escalate), prior gains may need to be ‘given back’—i.e., a corrective pullback.”
On U.S. equity indices, his core message was: $标普500(.SPX)$ $标普500ETF(SPY)$
“Within the framework of ‘midterm elections drive everything,’ U.S. equities in midterm-election years have often experienced an intra-year drawdown of around 20%. Combined with the unusual divergence of stocks rising while the VIX also rises, he warned that Q1 could see a fast, sharp downside move—so using index options (such as buying puts) as hedging/portfolio insurance makes sense.”
And then we saw exactly that pullback mechanism start to play out: the risk narrative softened versus what the market had priced, meaning the downside adjustment was less about “new bad news” and more about “less-bad-than-feared.” In plain terms: another TACO moment.
From there, he moved into a market-by-market breakdown.
Silver market analysis $白银主连 2603(SImain)$ $白银ETF-iShares(SLV)$
Historical volatility recap
Using the weekly chart of the CBOE Silver Volatility Index:
In April 2011, silver surged toward USD 50 and volatility spiked to around 88, followed by years of quiet.
In March 2020, the pandemic triggered a sharp drop in gold and silver, with volatility reflecting a fear shock.
In 2021, the Reddit-driven “silver squeeze” narrative produced a one-day spike-and-reversal, with volatility printing a record high near 130.
In the current episode, volatility is approaching 2021 levels, ranking as the second-highest in history.
What the current volatility is saying
Silver volatility is now at historical highs. From positioning, volatility, and volume perspectives, he argued the market no longer supports the kind of sustained, aggressive upside seen earlier in the move.Positioning and volume signals
Futures positioning: Net long exposure in silver futures peaked around May–June last year and has trended lower since. In the early stage of this rally it rose briefly, then continued to de-risk—suggesting institutions and “mainstream money” were not expecting (or not betting on) further outsized gains, even as price action proved stronger than their baseline view.
ETF volume: This week, the SLV silver ETF printed record turnover of about USD 32 billion—roughly 15x its average volume—and even surpassed the S&P 500 ETF’s trading volume. He described this as silver behaving like a new-generation “meme asset,” which is typically not a sustainable regime.
Gold–silver ratio and the takeaway
The gold–silver ratio has fallen to around 46, near a historical low zone. His interpretation: silver’s outperformance versus gold may be approaching its later stage, and the risk of a reversal/pullback is rising.
Gold Market Analysis $黄金主连 2604(GCmain)$ $微黄金主连 2604(MGCmain)$
Capital flows and “market health”
ETF inflows: Gold ETFs saw a strong week, with nearly USD 5 billion of net inflows—roughly equivalent to about 34 tonnes of physical gold. Year-to-date inflows have reached around USD 11 billion, and total assets under management stand at about USD 650 billion. Versus the silver market, this looks more “healthy” and stable.
Macro support: He argued that gold still has multiple long-term macro tailwinds, including geopolitical risk, fiscal unsustainability, declining confidence in fiat currencies, de-dollarization, reserve diversification, the risk of “second-wave” inflation, and an easier monetary environment—factors that don’t disappear overnight.
Event-driven moves and the short-term path
U.S. government shutdown risk: With another shutdown risk on the table, he noted that if both parties reach a temporary spending deal over the weekend and avoid a shutdown, some of the immediate drivers behind gold’s near-vertical rally could fade—potentially weighing on short-term upside.
Middle East risk: He suggested Iran may respond forcefully to U.S. actions; if the U.S. escalates, the situation could intensify and move oil and gold. At the same time, he believes Trump will be more cautious due to the midterm-election backdrop, which may constrain decision-making.
Historical pattern and target valuation
Post-rate-cut seasonality: Looking at historical cycles, he summarized that after the Fed starts cutting rates, gold often rises in the first month, dips in the second month, and then trends higher from the third through the sixth month. He argued last year’s September 17 rate cut followed this rhythm closely, and he therefore warned that January–February could mark an important top or a medium-term top.
Valuation target: Using a valuation-style framework, he noted gold’s 10-year annualized compound return peaked around 35% in the 1970s and reached around 20% in 2010–2011. Based on this, he sees the current bull market’s upside potential extending to above USD 6,000—but also cautioned that returns near a 20% annualized regime tend to coincide with a zone where long-term risk-reward starts to deteriorate.
Trading strategy suggestions
With gold implied volatility at historically elevated levels, he recommended structured approaches—such as calendar spreads, vertical spreads, or diagonal spreads—rather than pure one-way directional bets, to better manage swings and drawdowns.
U.S. Equity Market Analysis $标普500(.SPX)$ $标普500ETF(SPY)$
Index behavior and key signals
S&P 500 range trading: The S&P 500 has been moving sideways in a broad consolidation range since September, with a pattern resembling the late-2024 to Q1 2025 setup. This week, the Nasdaq broke above its 4-hour downtrend “cap” from the prior consolidation, but the follow-through has been choppy—more of a “one step forward, three steps back” kind of advance.
Unusual VIX setup: Recently, the S&P 500 has been rising while the VIX has also been rising. Historically, this kind of “stocks up + volatility up” mix often precedes a sharp downdraft, so the key risk to watch is a fast downside move in Q1.
Trading strategy takeaways
Stock-picking with index hedges: The idea is to separate stock selection from index risk—focus on individual names rather than treating the index as the trade, and use index hedges as insurance against systemic drawdowns. In practice, that can mean staying long select mid-caps and small-caps (for example, energy and resources) while simultaneously buying index puts or building bearish spreads (e.g., bear put spreads) to cap downside exposure.
Pair-trade angle (U.S. vs. EM): From a mean-reversion perspective, U.S. equities have outperformed emerging markets for a long time, with the valuation/performance gap stretching beyond a “normal” deviation band. A potential expression is a relative-value or paired trade using U.S. equity valuation versus emerging-market valuation—keeping an eye on markets like South Korea and Brazil as examples of where relative momentum has been showing up. $纳斯达克100指数(NDX)$ $NQ100指数主连 2603(NQmain)$ $纳指100ETF(QQQ)$
Trading notes
Silver: Given its highly speculative nature right now, he does not recommend trading it in large size; instead, shift your attention more toward gold.
Gold: Prefer structured trades (spread-based setups) rather than outright one-way directional positions.
U.S. equities: Use index options for hedging to manage systemic risk.
Risk reminders
He expects major volatility in commodities around late January to early February. Key variables to watch include the U.S. government shutdown risk and the Iran situation; if the market prices in “too much” worst-case risk, an inflection (regime flip) could hit in early next month.
Be alert to “TACO trades” showing up in commodities again—if the narrative suddenly de-escalates, what got bid up on fear may have to retrace quickly.
So for traders looking ahead, the single most important thing to watch is: who exactly will be the Fed Chair. That choice can dramatically reshape market expectations, which means our trading framework may need to adjust accordingly.
See you next week.
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