Gold and silver prices plummeted overnight, returning to levels seen before the recent rally?

On February 5th, international gold and silver prices experienced a sharp decline, with silver futures dropping over 9% in a single day and gold futures falling more than 1%. Even more astonishing, silver prices retreated nearly 50% from the all-time high on January 29th, marking a "half-cut" correction.
Why is the volatility so intense?
Analysis by UK-based Suckton Financial indicates that silver's current trend is mainly driven by capital flows rather than physical fundamentals. Due to the relatively small size of the silver market, large inflows and outflows of speculative funds can easily trigger significant fluctuations. Additionally, global central banks have recently maintained steady interest rates, and the lack of new monetary policy stimuli has also deprived the precious metals market of sustained upward support.
What is the outlook?
Despite the intense short-term volatility, some institutions remain optimistic about the medium- and long-term trends. Canadian Imperial Bank of Commerce predicts that this year, the average gold price could reach $6,000 per ounce, and the average silver price around $105. Geopolitical risks and the US dollar trend remain key variables influencing gold and silver prices.
The gold and silver markets are shifting from a phase of "frenzied rally" to "intense fluctuation." Investors should be cautious of high volatility, rationally view short-term gains and losses, and pay attention to both fundamental and macroeconomic sentiment changes.