Hua Er Jie Jian Wen·2026-02-02 09:06Core Viewpoint - The precious metals market continues to decline, with silver dropping 7% and gold falling 4.7%, breaching the $4500 mark, indicating a significant market correction driven by profit-taking and forced liquidation of leveraged positions [1][4]. Group 1: Market Dynamics - The recent drop in precious metals is attributed to multiple factors, including policy expectations, trading congestion, and exchange interventions [5]. - The nomination of Kevin Warsh as the new Federal Reserve Chairman has heightened hawkish expectations, leading to a stronger dollar and tighter liquidity, which negatively impacts precious metals [5][10]. - Exchanges like CME and SHFE have raised margin requirements, contributing to the market's downward pressure [5][7]. Group 2: Speculative Positioning - Prior to the crash, silver was one of the most crowded long positions globally, with extreme speculative positioning indicated by a 14-day RSI for gold exceeding 90, marking a historic high [7]. - The volatility index for silver reached 111, the highest on record, suggesting a precarious market environment where any reversal in sentiment could lead to severe deleveraging [7][10]. Group 3: Macro Influences - Concerns over profitability in AI tech stocks, such as those reported by Microsoft and Tesla, have led to a risk-off sentiment in the U.S. stock market, prompting some investors to liquidate precious metals to maintain liquidity [10]. Group 4: Future Outlook - Despite the short-term turmoil, institutions believe the long-term bullish logic for precious metals remains intact, supported by ongoing demand from central banks and concerns over U.S. debt sustainability [11][13]. - The market is expected to experience a period of wide fluctuations, with cautious buying sentiment prevailing in the near term [13][14]. Group 5: Investment Timing - Investors are advised to be patient and wait for volatility to decrease before entering the market, with specific indicators such as implied volatility dropping below 20% being suggested as potential entry points [16]. - Historical data indicates that gold typically sees an average pullback of about 8% over approximately 18 days after reaching a peak, providing a reference for potential timing [16]. - There is a warning regarding the risk of price discrepancies between spot and futures markets, particularly for silver, which may still have room for further declines [16].