2025-12-31 03:24:53

Precious metals crashed again today. Shanghai Gold 2602 closed at 984.84 yuan/gram, a single-day plunge of 3.11%; Shanghai Silver 2602 fared even worse, dropping to 18,140 yuan/kilogram, with a decline of 3.96%. It looks abrupt, but there were signs long ago.

Since December, gold and silver have surged sharply, especially silver, but this wave of gains has long diverged from fundamentals. What is the real driving force? Tight spot market, bottomed-out inventories, and squeezing market conditions. This kind of capital-driven rally is inherently laden with the risk of a correction.

The fuse has been ignited—multiple bearish factors hit simultaneously. First, the Federal Reserve's stance has changed. The market is beginning to doubt whether the Fed will continue to cut rates significantly in 2026. U.S. economic data stabilizing and soaring raw material prices increasing inflationary pressure will limit the Fed's room to cut rates. Second, Bloomberg Commodity Index (BCOM) will undergo annual reweighting on January 8. Gold and silver have performed too well over the past three years, with weights already exceeding limits, and this adjustment will definitely suppress short-term gold and silver trends.

Looking ahead? The long-term logic of gold as a dollar substitute remains intact, and medium-term outlooks are still optimistic. But silver needs to be cautious—although spot shortages have pushed prices to record highs, volatility has also surged. Trading requires strict position control, setting stop-losses, and guarding against large withdrawals during high-volatility periods.

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BlockTalk

· 3h ago

It's the Federal Reserve messing around again, always the same. Silver's move was too fierce; it should have fallen earlier. Short squeeze行情就是这样，涨得快跌得也快，我早就减仓了。 Bloomberg调整权重？Now gold and silver can finally breathe. Gold still has room to bottom fish, but avoid silver for now; the volatility is too crazy. Stop-loss must be strict; catching the top is suicide. The logic of tight spot market supply has been played out, liquidity is the real boss. Mid-term, watch gold; short-term, both gold and silver are risky, I'm currently observing. The dollar rate hike expectations are rising, precious metals are tough to hold. That's why you can't go all in; you need to keep some bullets, friends.

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ILCollector

· 3h ago

Here we go again, this squeeze is just a trap

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GasWaster

· 3h ago

Another squeeze market collapse, it's really time to wake up this time.

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SelfCustodyIssues

· 3h ago

Here it comes again, this inevitable correction. I saw it coming a long time ago.

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rug_connoisseur

· 3h ago

Here we go again, this wave of liquidation is really fierce, silver drops directly by 3.96%, I knew that squeezing positions would eventually lead to a correction. --- The Federal Reserve changes its tone, precious metals are hit hard, this is called reality. --- Inventory is bottoming out, and the overweight is excessive; it turns out all that wealth was just on paper. --- Gold can still be bought at the bottom, but I won't touch silver this time, it's way too easy to be smashed down. --- Bloomberg's weight adjustment caused a plunge, don't expect a turnaround in the short term, better wait and see. --- This is the result of capital pushing prices higher; without fundamental support, it's just a trap. --- Just asking, who was buying at high levels? --- The Fed's rate cut expectations have shattered, gold and silver are following as casualties, it's heartbreaking. --- Strict stop-loss is the way to go, otherwise a sharp drop from high levels can be really brutal.

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DeFiAlchemist

· 3h ago

spot squeeze turning into a liquidity death spiral... the mathematical elegance of this transmutation is almost poetic, really. when the philosopher's stone crumbles, all the yield farmers scatter at once.

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