On 30 January 2026 an almost month-long rally in precious metals ended in an abrupt, unprecedented sell-off: spot gold plunged as much as 16% in a single day, the largest drop in nearly four decades, while silver briefly collapsed by close to 36%, erasing almost a month’s gains.
The rout rippled through markets and social media, but it produced an unusual scene on the ground in Beijing. At the Caibai flagship in Xicheng district, elderly shoppers formed long, disciplined queues on the fourth floor and bought investment gold bars in sizes ranging from 5g to several hundred grams, treating the panic as a buying opportunity even as prices swung dramatically within minutes.
The contrast between calm older retail buyers and anxious younger investors online was sharp. Many of the seniors purchased 100g or larger bars and stood patiently as shop staff managed flow in four separate zones—waiting, selection, payment and pickup—because price quotations are updated about every three minutes and a half-hour delay could change a 100g purchase by several thousand yuan.
Younger, digital-native investors experienced a different reality. Some who had bought into the 2024–25 gold and silver boom were trapped by timing rules or faced liquidity squeezes: a popular silver fund had a T+2 settlement, meaning investors could not sell for two trading days, and fast intraday volatility turned floating gains into painful losses for late entrants.
The immediate drivers of the crash were technical and structural. Precious metals had already logged extraordinary gains in 2025—gold up roughly 64% and silver near 140%—leaving prices vulnerable to a sharp correction. Open interest and positioning on COMEX did not fully mirror the retail exuberance, suggesting professional players were less committed to pushing prices higher. A margin increase by US exchanges—raising gold and silver futures margins to about 8% and 15%—also forced leveraged traders to liquidate positions.
Beyond market mechanics, policy uncertainty amplified the sell-off. The nomination process for the next Federal Reserve chair and lingering questions about the path of US monetary policy fed investor anxiety about the dollar and interest rates, both key influences on precious metals.
Retail market structure in China added another layer of friction. Caibai’s fees range from 12–18 yuan per gram for physical gold purchases, with buyback prices usually quoted at real-time market rates minus roughly 3.8 yuan per gram. In response to the turmoil and surging counterparty flows, Caibai announced on the evening of 2 February that it would suspend buybacks on non-trading days from 6 February and implement limits on daily repurchases, a move intended to stabilise operations but one that raises liquidity questions for holders of physical bars.
Analysts remain divided over the medium-term outlook. Some banks and commodity strategists still project higher average prices—CIBC analysts forecast an average gold price near $6,000/oz for 2026 and a peak around $6,500/oz in 2027, with silver climbing back toward $105/oz in 2026 and $120/oz in 2027. Other research houses warn the bull run’s endgame will depend on whether US monetary policy turns definitively hawkish or whether secular forces—such as central bank demand and geopolitical risk—continue to underpin safe-haven flows.
For investors, the episode underscores two blunt lessons. First, extraordinary rallies can produce violent mean reversion when institutional positioning and retail demand are out of sync. Second, the mechanics of physical markets and product-specific rules—fees, buyback terms and settlement delays—matter as much as macro views when volatility spikes. The human tableau in Beijing—elderly buyers calmly buying bars as younger traders fretted over digital accounts—captures both the cultural particularities of China’s retail market and the global fragility of a market that had been running very hot.