Global gold and silver markets have swung from a blistering rally to a sharp correction, and for the first time in weeks Chinese retail demand is showing signs of cooling. On February 2 spot gold slid roughly 6.8% to about $4,562 per ounce while spot silver fell more than 11%, briefly turning positive in the morning before collapsing to $75.49 per ounce. The move follows a historic surge in January—COMEX gold and silver futures posted extraordinary gains driven by anxiety over dollar weakness, geopolitical risk and questions about Federal Reserve independence.
The peak of that euphoria came at the end of January when COMEX gold futures exceeded $5,600 per ounce and silver topped $120, only to see both markets implode on January 30: gold futures fell 8.35% and silver tumbled 25.5% that day. Market participants and analysts point to a clear catalyst: the nomination of Kevin Wash as U.S. Federal Reserve chair by President Trump cooled fears about the Fed’s political independence and prompted a dollar rebound, which removed a central support for the metals’ rally.
The price rout is visible on the ground in China’s retail bullion market. Banks that had repeatedly reported sell-outs of small, investor-friendly gold bars are now showing inventory. Several major banks’ apps that earlier declared products ‘‘sold out’’ have returned to ‘‘in stock’’ status for 1g–1000g bars, with some smaller weights—previously the hottest sellers—now readily available.
Retail behaviour has bifurcated. Some individual investors, citing falling prices, are choosing to wait for further declines and view the correction as a signal to sit cold. Others are opportunistically “buying the dip,” topping up holdings in small 1g–5g bars for sentimental or long-term preservation reasons rather than short-term trading.
Chinese banks, which have been both distributors of physical bullion and loud risk communicators during the episode, have repeatedly cautioned customers that recent precious-metal volatility is acute. Industrial and Commercial Bank of China, Bank of China and China Construction Bank issued warnings or tightened access to accumulation programs, urging investors to assess risk tolerance and manage positions and margin requirements carefully.
Institutional perspective remains mixed but broadly supportive of a longer-term bullish case. Research units at domestic brokers and futures houses say the immediate shock has shifted gold into a phase of wide consolidation rather than a renewed, trend-defining decline. Their consensus is that while speculative, sentiment-driven dynamics dominate the near term, structural drivers—central bank buying, concerns over dollar durability and geopolitical uncertainty—preserve a longer-term floor under prices.
Analysts also stress that this bull market differs from previous cycles: earlier gold rallies were primarily liquidity-driven, but the current episode is tied more to questions about U.S. dollar credit, monetary credibility and shifting geopolitics. That distinction, they say, makes the narrative more durable even if short-term financial flows and headlines produce dramatic swings.
For international investors and policy watchers, the episode is a reminder that bullion markets now sit at the intersection of politics, macro policy and retail behaviour. A change in perceived Fed independence can prompt rapid currency and commodity repricing, and the reappearance of bank inventories suggests that the white-hot retail momentum that amplified the January rally has been at least temporarily checked.
The practical implications are threefold: bullion-backed exchange-traded products, miners and fabricators face increased price and demand volatility; banks that expanded retail bullion services may manage higher operational and advisory responsibilities; and central banks and large institutional buyers remain the critical marginal holders who will determine medium-term price direction. In short, markets have entered a breath-holding phase in which headlines and policy signals—not only fundamentals—will likely dictate the next major move.