$1.28 Trillion Wiped Out as Gold & Silver Crash—Is Lunar New Year Liquidity Driving the Drop?

Group 1 - Gold and silver markets are experiencing a significant correction, with prices declining for two consecutive sessions and commodity-based ETFs dropping by up to 4%, resulting in an estimated $1.28 trillion loss in combined market value [1][4] - The recent decline follows a strong rally earlier in 2026, where gold prices exceeded $5,000 per ounce and silver reached record highs, indicating a pullback influenced by seasonal factors, macroeconomic pressures, and profit-taking [2][7] - Silver has been particularly affected, falling nearly 40% from its all-time high of $121.646 recorded in late January, with current trading at $74.11, highlighting its volatility compared to gold [2][3] Group 2 - The Lunar New Year holiday period is identified as a short-term driver of reduced trading activity across major Asian financial centers, leading to lower liquidity and amplified price movements in global futures markets [5][6] - Weaker demand during the holiday period is expected to temporarily pressure prices, with potential for physical buying to resume once trading activities return to normal [6] - Broader macroeconomic developments are also contributing to the downturn, as investors are focusing on narratives that strengthen the US dollar in the short term, impacting precious metals [7]