2026-02-25 15:28:54
|
72
0
Severe Liquidation: A Technical Squeeze Triggered Short?Term Panic, Not a Fundamental Breakdown
In late January, the international precious metals market experienced an extraordinary bout of volatility. Gold plunged more than 12% in a single day — the steepest decline since the 1980s — while silver suffered an even more dramatic drop of over 35% in one session, falling a cumulative 41% within three days. The abrupt market reversal was driven primarily by two factors: the nomination of Kevin Warsh as the next Federal Reserve Chair, which heightened expectations of a stronger U.S. dollar; and the CME’s decision to raise margin requirements during extreme volatility — increasing gold margins from 6% to 8% and silver from 11% to 15%. This forced large numbers of highly leveraged speculative positions to liquidate, turning a routine correction into a liquidity driven cascade. Despite the severity of the decline, the nature of the move was more consistent with a technical squeeze than a deterioration in underlying fundamentals.
Macro Support Intact: Gold’s Long Term Bullish Structure Remains Firm as Institutions Raise Forecasts
From a medium to long term perspective, the fundamental drivers supporting gold have not weakened — they have strengthened. Macquarie recently revised its 2026 Q1 gold price forecast upward to USD 4,590 and raised its full year target to USD 4,323, alongside a significant upward revision of its Q1 silver forecast to USD 75. Major global institutions such as Bank of America and JPMorgan have likewise upgraded their medium to long term projections. Bank of America now expects gold to test USD 5,000, while JPMorgan forecasts an average of USD 5,055 in 2026, with long term potential approaching USD 6,000. These upward revisions reflect reinforcing tailwinds: accelerated global de dollarization, persistent central bank gold accumulation, and elevated geopolitical risks. Meanwhile, S&P Global reports that gold set 12 new all time highs in January 2026, reaching an intra month peak of USD 5,405 — a surge supported by continued ETF inflows and robust safe haven demand. Overall, gold remains firmly positioned within a strong, ongoing bull market structure.
Silver’s Structural Resilience: Expanding Industrial Demand and a Persistent Supply Deficit Lift Long Term Price Potential
Although silver tends to exhibit higher short term volatility than gold, its underlying fundamentals remain resilient. The global silver market recorded a supply deficit for the fourth consecutive year in 2025, with the shortfall exceeding 200 million ounces, driven by vigorous demand from solar power, new energy applications, and the electronics sector. Against this backdrop, various research institutions have raised their full year price projections into the USD 62–100 range, reflecting broad market confidence in silver’s long term trajectory. With its dual identity as both an industrial and a precious metal, silver often delivers greater elasticity during market rebounds, making it an appealing medium term allocation opportunity.
Q1 Market Strategy: A More Attractive Allocation Window Emerging After the Adjustment
As extreme sentiment gradually subsides, gold has stabilized around the USD 5,000 mark and consolidated within the USD 5,000–5,350 range, suggesting that long term capital is returning to the market. From an asset allocation perspective, the sharp correction has effectively created a “second entry window” for strategic gold allocation. Central bank purchases remain robust, geopolitical tensions persist, and the U.S. dollar’s direction remains uncertain — all reinforcing the strategic case for gold in Q1. Technically, the USD 4,500–4,550 range provides solid support, making it an attractive zone for medium to long term accumulation should prices pull back. Meanwhile, silver continues to fluctuate within a broad USD 70–85 band, offering opportunities for tactical trading, while the post sell off rebound in the gold silver ratio allows room for relative value adjustments in favor of silver.
Key Risk Factors: Policy Shifts, Liquidity Dynamics, and Global Developments Require Close Monitoring
Despite the constructive long term outlook, investors should remain alert to several risk factors. First, policy uncertainty surrounding the incoming Federal Reserve leadership may drive further fluctuations in the U.S. dollar, potentially impacting precious metals pricing. Second, liquidity conditions in China following the Lunar New Year may once again influence gold and silver prices — particularly given the notable role Chinese capital played in driving previous market gains. Third, U.S. tariff policy remains fluid. Recent tariff announcements have repeatedly pushed gold above USD 5,000 and helped lift silver past USD 81, underscoring the central role of global trade policy in shaping precious metals volatility.
Upway Global: At the Forefront of Gold Trading and Market Excellence
As one of the elite members of the Hong Kong Gold Exchange (HKGX) with AA operation status (Membership No. 084) and a core member of the Bullion Group, Upway Global was awarded the prestigious "Authorised Good Delivery Bars Minter" certification—the highest standard in refining and delivery of physical gold bars, confirming its capability to produce gold bars that meet international purity and quality standards. This recognition signifies Upway Global’s commitment to upholding industry-leading professionalism and integrity while reinforcing Hong Kong’s position as Asia’s global gold trading hub.
Demonstrating robust market strength, Upway Global’s daily transaction volume recently surpassed USD 80 billion, setting a record and underscoring its role as a market leader. With over 2.1 million active traders and a cumulative order volume exceeding 700 million, Upway Global continues to foster a trading ecosystem characterised by transparency, security, and efficiency. The company’s average monthly trading volume in 2025 til now exceeded USD 681 billion, making it the top performer on the HKGX platform.
Risk Disclosure
This report is based on publicly available information and mainstream media coverage. Policies and data may change upon release of official documents or judicial rulings. Precious metal prices are affected by USD dynamics, interest rates, geopolitics, and central bank demand, among other factors, and are subject to significant volatility. Any investment views herein are for reference only and do not constitute investment or trading advice for any individual. Please assess decisions prudently in light of your own risk tolerance and financial conditions.
简体中文
繁體中文
Gold/Silver CFDs
Accounts
Wallet
Promotions
Trading Tools
News Updates
Economic Calendar
Investment Academy
Beginner’s Guide
Anti-Fraud Guide
FAQs
Upway APP
Upway Desktop
CTOTrader
Upway HD
MetaTrader 4
MetaTrader 5
About Upway
Company News
Affiliate Program
Contact Us
