Last Updated on February 3, 2026 by Deon
The Bounce-Back: Bullion Regains its Panic Breath
In the wake of what has been a financial horror-show of a weekend, finally the “Yellow Metal” and its unpredictable cousin Silver are coming out swinging. After a couple of days of vicious selling which sent Gold into the drink down almost $1,000 from its high, Tuesday February 3rd brought some welcome respite.
In typical “Buy the blood in the streets,” Gold futures RALLIED a not-worth-goodness gain of 6.3% to just get back up to $4,946 and Silver did even BETTER righting itself by precisely 12.6% to square-off $86.69.
Why the Tide Turned: The ‘Value’ Hunt Begins
The sharp decline from above $5,600 to $4,403 was a bit of short-term shock treatment, but it has also produced a “generational” entry point for all those who weren’t able to get in on the rally off the January low.
Support in Asia: The Chinese speculators who helped propel last month’s run to a record $5,500 seemed to step back into the market on Tuesday. Technical traders are now looking at the $4,400 wedge as a “hard floor.”
Short-Covering: A lot of today’s 6% surge was due to “short-covering”—traders who had made bets that the price would crash were now forced to buy back their positions as the price stabilized, adding unintentionally to the bounce.
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While the “Warsh Shock”—triggered by President Trump’s hawkish Fed chair nomination—may have jolted the market, it certainly didn’t rock the world’s largest banks.
JPMorgan’s $6,300 Call: JPMorgan made a big bet on gold to kick off the week, increasing its year-end forecast for gold to $6,300 with “unwavering” demand from central banks and an impending global move into hard assets.
Deutsche Bank’s $ 6,000 Floor: Deutsche Bank repeated its target of $6,000 and referred to the recent slide as a “tactical correction” rather than an actual reversal in trend.
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Silver soared by 12.6% in the headline-stealer of the day. The white metal lived up to its nickname as the “high-beta” version of gold, after suffering its biggest single-day drop since 1980 on Friday.
Industrial demand: UBS analysts say silver is volatile, but structural demand from the EV and solar space continues to be a huge tailwind.
Watch Out: Silver is Still a “Death Trap” for the Unwary Despite a bounce, it has been remarkably weak. The CME Group has increased margin requirements to 15%, and at this level, only the steadiest-hand traders are surviving.
The Verdict: A Healthy Reset, or a Dead Cat Bounce?
UBS’s Joni Teves says it all, “This correction is going to be good for the market in the long term.” Cast “weak hands” and speculative froth out, and you have a more firm base to the market.
But the “Warsh Effect” has not yet been fully felt. Attention now shifts to Friday’s Non-Farm Payrolls (NFP). Now if the jobs data print ‘hot’, we could see another swing higher in Dollar, one that would really, finally put this “Aftershock Bounce” to the test.
