Intraday straight-line plunge! Several stocks just hit the daily limit down! Silver collapsed

Gold and silver prices plunge again!

Today, spot silver prices took a sharp dive. During trading, spot silver fell by over 16% at one point, and spot gold dropped by over 3% at one point.

A-shares gold concept stocks also saw significant declines. As of the time of writing by Securities China, Silvercorp, Hunan Silver, Hunan Gold hit the daily limit down, Sichuan Gold approached the limit down, and Yuguang Gold & Silver, Xiaocheng Technology, Industrial Silver & Tin, Zhaojin Gold, China Gold, and others all fell sharply.

An institution stated that currently, market sentiment for precious metals remains unstable, and high volatility may continue for some time.

Gold and silver plunge dramatically

Recently, gold and silver prices have been on a “roller coaster,” experiencing a thrilling surge and plunge. This rapid switching in trend has caused market participants to exclaim “heart pounding.”

On February 5, during trading, gold and silver prices again experienced a sharp plunge. Spot silver once fell by over 16%, breaking below the $74/ounce level, essentially erasing the rebound from a few days prior; spot gold also dropped by over 3%, briefly falling below the $4,800/ounce mark.

As of the time of writing by Securities China, the price declines have narrowed slightly, with spot silver down 13.75% at $76.496/ounce, and spot gold down 2.03% at $4,867.5/ounce; in futures, COMEX silver futures and COMEX gold futures fell by 9.16% and 1.41%, respectively.

On the news front, U.S. Senate Banking Committee Chair Tim Scott said that the possibility of Kevin Warsh, Trump’s nominee for Federal Reserve Chair, being confirmed by the Senate is 100%. Scott expressed confidence that Thom Tillis (a Republican senator on the Senate Banking Committee) will vote to confirm Warsh after the Jerome Powell issue is resolved.

OCBC Bank strategist Christopher Wong said, “Sentiment across most asset classes, including regional stocks and metals, seems to have weakened. This highlights the fragility of market sentiment and creates a feedback loop in an environment of thin liquidity.”

Last month, precious metal prices surged sharply due to speculative momentum, geopolitical turmoil, and concerns over the independence of the U.S. Federal Reserve. However, this rally came to an abrupt halt last Friday. Silver experienced its largest single-day decline ever last Friday, and gold saw its biggest drop since 2013.

The market is assessing the policy impact of Kevin Warsh’s nomination as Fed Chair. U.S. President Donald Trump said on Wednesday that if Warsh had expressed a desire to raise interest rates, he would not have nominated him as Fed Chair.

Trump stated that there is “not much” suspense about the Fed cutting rates because “our interest rates are too high,” but now “we have become a wealthy country again.” When asked whether Warsh understands that the U.S. president wants him to lower the benchmark interest rate, Trump replied, “I think he understands, but I think he also wanted to do that.” These comments from Trump could be mentioned during Warsh’s confirmation process, and the Fed’s independence is likely to become a key issue.

Institutions: Short-term high volatility may persist

Recently, the silver market has experienced significant surges and crashes, with its sharp fluctuations largely detached from short-term fundamentals, driven more by market sentiment and speculative capital behavior. From a fundamental perspective, the global silver supply and demand structure has not undergone major changes in recent weeks: despite strong industrial demand and ongoing physical supply-demand gaps, these factors mainly support medium- to long-term prices rather than directly driving short-term extreme volatility.

Guoxin Futures stated that this historic-scale plunge has completely reshaped the short-term ecosystem of the precious metals market, marking the end of a one-sided, smooth trend. The market has officially entered a new phase dominated by higher uncertainty and normalized volatility. The driving logic has shifted from simple “loose monetary policy and safe-haven” to a fierce battle between bullish and bearish factors: in the long term, structural supports such as geopolitical risks and central bank gold purchases under de-dollarization still exist; but in the short term, policy uncertainty caused by leadership changes at the Federal Reserve will be the main variable causing sharp price fluctuations. Warsh’s nomination and potential policy orientation are forcing the market to reassess previous expectations of extreme easing.

Shenwan Hongyuan Futures pointed out that Warsh’s nomination triggered profit-taking and led leveraged funds to flee in a stampede, further amplifying market volatility. In the short term, market fluctuations are intensifying. Although silver has already adjusted significantly, the gold-silver ratio remains low, and silver prices are expected to remain under pressure. It is recommended to stay on the sidelines for now. Regarding gold, short-term market volatility has increased, and it is advised to wait and see. After sufficient market adjustment, gold is still expected to resume a steady upward trend.

Guoxin Futures suggested that in the short term, investors should adopt a cautious and defensive stance. While the long-term rationale for holding gold remains intact, in the face of market volatility, it is recommended to keep only a light position in gold longs as a core holding to maintain exposure to the long-term trend, rather than betting on short-term fluctuations. Due to their higher speculative nature, risks for silver and platinum-group metals have sharply increased. Participation should be extremely cautious, and reducing positions or switching to a wait-and-see approach is advisable.

“Silver futures have broken below key support levels, and short-term consolidation or correction may continue. Market sentiment remains unstable, and high volatility could persist. Attention should be paid to macroeconomic data, geopolitical events, and changes in international monetary policies,” said Guojin Futures in its report.

Standard Chartered analyst Sudakshina Unnikrishnan and others wrote in a report: “Before monetary policy outlook becomes clearer, price volatility may continue. Some short-term fluctuations are due to investors redeeming ETF holdings, but structural drivers remain intact. We still expect prices to rebound.”

ING commodities strategist Ewa Manthey said, “Although short-term volatility may persist, we believe this correction is driven by position adjustments rather than a structural reversal. In the coming weeks, the pace and sustainability of any further gains will be influenced by the dollar trend, interest rate expectations, and risk sentiment. Precious metals are more likely to rise at a more stable pace rather than experiencing explosive growth like in the past three months.”

(Source: Securities China)