Gold and Silver Sell-Off Continues as Asian Markets Open on February 2
The sell-off in gold and silver continued as Asian markets began trading in the morning session today (February 2).
Last week, gold prices hit an all-time high at around USD 5,600/oz before plunging nearly USD 700/oz from the intraday peak on Friday, marking the largest absolute daily decline in history. Silver prices also dropped as much as 30% during the session, recording their sharpest fall since the 1980s, retreating from the record zone above USD 120/oz reached earlier.
Analysts say the sharp volatility in precious metals prices is not surprising, given that the prior rally had become excessively stretched.
Before the historic sell-off, gold prices had surged nearly 30% in January, while silver prices jumped nearly 70%. Speaking to Kitco News, several experts noted that such gains—especially in the first month of the year—are never sustainable.
“The past few days have seen unbelievable volatility in the precious metals market. The sell-off was probably not unexpected, considering the speed and magnitude of the price increase in January. From a technical perspective, both gold and silver prices were extremely overextended. Speculative positioning, leverage usage, and options market activity had all reached short-term extremes,” said Neil Welsh, Head of Precious Metals at Britannia Global Markets.
According to Ole Hansen, Head of Commodity Strategy at investment bank Saxo Bank, the sharp rise in gold and silver prices in January made trading conditions more difficult, contributing to the intense volatility seen recently.
“Market makers became more hesitant to take on risk, leading to thinner liquidity and wider bid-ask spreads. Friday’s price action was crazy, but looking at the entire week, the sell-off was completely normal for a gold market that suddenly started behaving like an unruly teenager—much like the silver market,” Hansen commented.
Matthew Piggott, Director of Gold and Silver Markets at Metals Focus, described the January rally in precious metals as irrational and the recent sell-off as a healthy correction.
Despite the heavy selling pressure, analysts do not believe the long-term uptrend in precious metals has been broken. While warning investors against entering the market too early, they say the correction could present buying opportunities.
“I believe the long-term uptrend remains intact. The macro forces supporting gold, silver, and copper prices are still in place. This sell-off appears to be a position adjustment rather than the end of an ongoing uptrend. In my view, the outlook for precious metals remains positively supported in 2026, although price ranges may become wider,” Welsh said.
Hansen believes gold still has a chance to reach USD 6,000/oz this year.
Despite extreme market volatility, Piggott said it is difficult to envision a prolonged sell-off, as investors continue to face significant geopolitical and economic uncertainty. “At any moment, we could face an unpredictable policy decision that reverses the status quo. As long as that risk remains, bullish sentiment in the gold and silver markets will persist,” he said.
Ipek Ozkardeskaya, a strategist at Swissquote, said gold prices could test support around USD 4,600/oz. “Pullbacks can be viewed as opportunities to reinforce bullish positions, as the major drivers of precious metals prices remain intact. These drivers include unsustainable and rising G7 debt levels, the declining appeal of the U.S. dollar, trade and geopolitical uncertainty, demand for assets that preserve value amid rising geopolitical tensions, and inflationary pressures that could reaccelerate,” she said.
Alex Kuptsikevich, Director of Analysis at FxPro, said he is watching the first support level for gold at USD 4,700/oz.
Beyond technical factors, the recent sell-off in gold prices was also linked to shifting expectations regarding U.S. monetary policy.
After President Donald Trump nominated Kevin Warsh, a former Federal Reserve governor, to serve as Fed chair to replace Jerome Powell—whose term ends in May—some analysts believe Warsh would bring greater policy stability in the coming years. Experts and investors alike believe Warsh would preserve the Fed’s independence despite pressure from the Trump administration to cut interest rates.
Although Trump has recently pushed for rate cuts, markets do not expect the Fed under Warsh’s leadership to pursue aggressive easing. According to data from the CME FedWatch Tool, markets continue to bet on just two rate cuts this year, with the first expected in June—unchanged from before Warsh’s nomination.
Meanwhile, economists at BNP Paribas forecast that the Fed will not cut rates this year. “Resilient economic growth and easing concerns about the labor market will lead the Fed to keep interest rates unchanged throughout 2026,” the bank said in a report.
Recent inflation data may further complicate interest rate expectations. A report released last Friday by the U.S. Department of Labor showed that headline Producer Price Index (PPI) inflation rose 3% in 2025, while core PPI increased 3.3%. Both figures remain well above the Fed’s 2% inflation target, indicating persistent and deeply entrenched price pressures in the economy.
This week, the U.S. nonfarm payrolls report for January, scheduled for release on Friday, will draw significant attention from precious metals investors.
The sell-off continued as Asian markets opened for trading this morning (February 2).
At 6:20 a.m. Vietnam time, spot gold prices in the Asian market were down nearly USD 175/oz from last week’s U.S. close, equivalent to a decline of nearly 3.6%, trading at USD 4,717/oz. Silver prices fell 9%, trading below USD 78/oz.
At this level, spot gold prices are equivalent to approximately VND 148 million per tael when converted using Vietcombank’s selling exchange rate.
At the same time, Vietcombank’s website listed the U.S. dollar at VND 25,720 (buying) and VND 26,110 (selling).
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