Gold Swings Nearly 10% Intraday — Is the Precious Metals Bull Market Losing Momentum?

By Cai Yuekun

Late on January 29 and into the early hours of January 30, 2026, the precious and base metals markets experienced a dramatic reversal. After an extraordinary rally that repeatedly set new historical records, a wave of large-scale profit-taking swept through the market, triggering what many traders described as an epic sell-off.

Spot gold in London plunged more than USD 400 within just half an hour, falling to around USD 5,100 per ounce and posting an intraday swing of nearly 10%. Spot silver dropped over 8%, slipping below USD 107 per ounce. On the futures side, COMEX gold fell nearly 4% and COMEX silver declined about 6%. Platinum slid close to 7%, while palladium retreated nearly 5%.

Cheng Xiaoyong, head of research at Huawen Futures Institute, told the Economic Observer that the sharp correction in precious metals was closely linked to three major factors. First, the U.S. Federal Reserve did not continue cutting interest rates in January. Second, safe-haven demand faded, with the VIX volatility index dropping to 16.88 on January 29—well below the level of 20 that typically signals market panic. Third, crowded long positions, including algorithmic trading strategies, were unwound in a concentrated manner. With bullish positioning extremely crowded, initial profit-taking quickly escalated into a broader stampede as longs rushed to exit.

A vice president at a leading futures company noted that after the massive rally, gold experienced extreme intraday volatility, with price swings reaching as much as USD 500 in a single day. Earlier geopolitical tensions—including frictions between the United States and Venezuela, as well as between the U.S. and Iran—had fueled the rapid rise in gold and silver prices. A weakening U.S. dollar further amplified the rally. Over the previous ten trading days, gold had surged more than USD 1,000, repeatedly breaking historical highs. Such a rapid ascent inevitably encouraged profit-taking, resulting in sharp fluctuations.

From Breakneck Rally to Sudden Plunge

As of the morning session break on January 30, the most active COMEX gold futures contract had fallen more than 7% from its historical peak, slipping below USD 5,200 per ounce. Shanghai gold futures for April delivery dropped 6.8% from the previous day’s high of RMB 1,258.72 per gram. Silver saw even steeper declines, with both COMEX silver and Shanghai silver futures falling more than 10% from their recent highs.

Just days earlier, precious and base metals had been enjoying a collective surge.

USD 5,000, 5,100, 5,200, 5,300, 5,400, 5,500 per ounce—since the start of 2026, spot gold had delivered a series of historic breakthroughs, capturing global market attention.

Beginning January 26, 2026, spot gold broke through the USD 5,000 per ounce mark for the first time. Over the next four days, prices advanced with remarkable momentum, smashing through six major psychological levels in rapid succession. On January 28, spot gold closed up 4.51% at USD 5,413.81 per ounce, with an intraday high of USD 5,419.24.

The rally continued on January 29, when spot gold surged to an intraday high of USD 5,598.75 per ounce, once again setting a new all-time record.

Silver also joined the historic run. On January 29, both spot silver and COMEX silver touched USD 120 per ounce, marking new highs. The most active Shanghai silver futures contract jumped more than 10% to RMB 31,488 per kilogram, extending its record-breaking performance.

The surge in international gold prices quickly fed through to the consumer market. Several major jewelry brands reported domestic gold jewelry prices exceeding RMB 1,700 per gram, also a historic high.

Following the sharp overnight sell-off on January 30, London spot gold briefly rebounded in early trading to around USD 5,400 per ounce, while spot silver recovered to approximately USD 118 per ounce.

As gold prices continue to hit new highs, market divergence is intensifying. The futures executive noted that in the short term, price volatility is likely to increase, with fierce battles between bulls and bears. Any signs of easing geopolitical tensions could trigger further price corrections.

Staying Alert to Short-Term Corrections

Cheng Xiaoyong emphasized that the recent pullback does not signal the end of the precious metals bull market. There has been no clear shift in U.S. monetary policy, nor any indication of tightening liquidity. On the contrary, liquidity remains ample. Overnight usage of the Federal Reserve’s reverse repurchase facility rose to USD 2.852 billion, up roughly 158% from USD 1.103 billion the previous day. The purpose of reverse repos is to absorb excess liquidity and support short-term interest rates. Looking ahead, central bank gold purchases, investment demand, hedging against beta risk, and gold’s evolving role in the international monetary system are all expected to continue supporting precious metals.

Recently, a brokerage metals analyst posted on social media: “What we are witnessing is a resource bull market that is surpassing history and shaping the future.”

Another analyst specializing in advanced metal materials echoed this sentiment, writing: “In 2026, get used to USD 5,000 gold, USD 100 silver, and copper starting at RMB 100,000…”

UBS Wealth Management’s Chief Investment Office (CIO) stated that the rationale for investing in gold remains strong and reaffirmed its recommendation to hold gold in global portfolios. For investors who favor the asset class, UBS considers a mid-single-digit allocation to gold appropriate within a diversified U.S. dollar portfolio. With gold already reaching the USD 5,000 per ounce target in its base-case scenario, UBS is now paying closer attention to whether the upside target of USD 5,400 per ounce can be achieved.

From a broader perspective, UBS believes commodities—including both industrial and precious metals—will contribute more meaningfully to portfolio performance in 2026. At the same time, supported by healthy growth and earnings trends, the firm remains constructive on global equities and views recent volatility as an opportunity to build diversified exposure.

Looking further ahead, Huaxin Securities argues that traditional analytical frameworks for gold offer limited explanatory power for the current rally. Instead, the surge reflects a combination of short-term U.S. dollar weakness and a longer-term shift toward alternatives to dollar credit, amplified by market sentiment and momentum-driven capital.

“Non-U.S. countries now hold gold whose value exceeds their holdings of U.S. Treasuries, signaling a broad consensus of declining confidence in the dollar,” Huaxin Securities noted. “Non-U.S. central banks are accelerating gold purchases to replace foreign exchange reserves. Given the rigidity of gold mine supply, large-scale central bank buying—amounting to tens of thousands of tons—will inevitably crowd out private investment demand, create physical shortages, and drive sustained upward pressure on gold prices over the medium to long term.”

Over the medium to long term, many institutions remain optimistic about precious metals, including gold. However, the risk of short-term pullbacks should not be ignored.

Huaxin Securities cautioned that the gold market is currently in an extremely optimistic phase, significantly increasing the likelihood of near-term corrections, consolidation, or sharp reversals after spikes. While the long-term outlook remains constructive, investors should remain alert to heightened volatility driven by overheated sentiment.

The futures executive also advised investors not to chase prices blindly, urging careful risk management and position sizing. With the long-term fundamentals for gold still intact, investors may consider waiting for prices to stabilize before re-entering the market.