Last Updated on February 2, 2026 by Deon
A Market in Freefall: The ‘Melt-Up’ Meets the ‘Meltdown’
The world of finance was still catching its breath after a weekend that redefined the word “volatility.” Having reached a stellar $5,626 only last Thursday, Gold has taken an almighty correction off the table offering at some $1,000 cheaper dollars trading ’round below* at $4,719 come Monday.
If Gold’s decline was historic in nature, Silver’s action was nothing short of cataclysmic. The white metal plummeted 31% on Friday — its worst one-day rout since the Hunt Brothers cemented their place in history books with a collapse in April 1980.
The “Hat” That Ate the Market: China’s $144M Scandal
And aside from the Fed and the Dollar, a cloud is gathering on the East. Word has emerged that well-known Chinese metals trader Xu Maohua, also known in trading circles as “The Hat,” has fled the country.
The Fallout: His disappearance prompted a string of unsettled contracts amounting to at least 1 billion yuan ($144 million).
The Contagion: Both state-backed firms and private traders are counting big losses, prompting Chinese regulators to demand an emergency audit of all major commodity trading houses. This Shanghai “liquidity black hole” has only hastened the global charge for the exits.
“Every Man and His Dog”: Exit Great
Veterans of the market are calling Friday’s price action a “mechanical purge.”
Trade Too Crowded: For months, everyone from retail “housewives” to institutional hedge funds was all in on precious metals. That wasn’t just a sell-off during the Kevin Warsh nomination that indicated a stronger dollar; it was a stampede.
ETF Unwinding: Contributing to the plunge was a powerful “cascade” of selling in ETFs and options. Automated systems dumped billions in assets on a market with fewer and fewer bids standing.
Deutsche Bank’s Bold Stance: $6,000 Is the Price to Beat
Not everyone is throwing in the towel amid the carnage. Deutsche Bank made headlines on Monday by sticking to its $6,000 gold prediction for the end of 2026.
The Reasoning: Analysts contend that the thematic drivers — geopolitical risk and a movement away from “paper assets” — have not changed.
A ‘Healthy’ Correction: In the eyes of the bulls, this $1,000 plunge has been a savage but cathartic adjustment in an.”unhinged” market, cleaning out “weak hands” before we move higher again.
The Verdict: A Fresh Reality for February
The PM market has moved from a “Dream” realm, into a “Battle” one. What a peculiar time to be a trader: The DXY is up, highs in returns for margin accounts are at record levels and the “easy money” of January feels like eons ago.
Now the attention goes as to whether the Gold $4,400 floor can sticks. If the Chinese “dip-buyers” fail to pick up the slack left behind by “The Hat,” then the correction may still have some room to run.
