Last Friday, silver prices recorded the largest drop in history, and gold also saw its largest single-day drop in decades. Following the unforgettable 'Black Friday,' the precious metals market in Asia experienced another intense fluctuation at the beginning of the week.
The recent market trends are similar to the sell-off wave in October 2025, but the intensity is much more extreme. At that time, a large sell-off of GLD (Gold ETF) triggered algorithmic liquidations, while this time high-frequency trading has accelerated the decline.
At the moment when investor fear reaches its peak, Wall Street's 'big players' and the 'retail investors' in the market are showing completely opposite actions. We diagnose the future market direction through internal analysis from Goldman Sachs' trading department and the landscape of the global retail market.
1. Record-breaking plunge, fear in the numbers
Price: Gold and silver recorded their largest single-day drop since the early 1980s. In the Shanghai market, silver prices were locked at the limit down all afternoon.
Volatility: The 1-month volatility index of the London Bullion Market Association naturally hit a new high, and liquidity in the options market evaporated instantly.
Trading volume: Last week, the nominal trading volume of gold and silver spot ETFs hit a historic high. In particular, the trading volume of SLV (Silver ETF) and GLD was exceptionally high, even surpassing most stocks among the 'Big Tech Seven.'
2. Candid conversations among Goldman insiders: 'Better safe than sorry vs still buying'
What kind of conversations circulate in Goldman Sachs' trading department amid market panic? The subtle differences in opinions among departments are quite interesting.
① Commodity trading department (KIM): 'Let’s hold back for now'
'We have significantly reduced directional risk exposure. Central bank purchases remain a structural positive, but investment demand has driven prices up too quickly. Holding a large beta (market volatility) exposure is unsettling. We are testing the market with positions that are very small and completely different from a year ago.'
② Commodity research department (STRUYVEN): 'Looking at $5400 in 2026'
'We maintain our gold price target of $5400 for December 2026, provided that central banks continue to purchase gold (60 tons per month) as they did last year, and the Fed cuts rates twice in 2026. In fact, the upside potential is greater. The long-term institutional investors we have contacted remain highly interested in increasing their gold allocations in their portfolios.'
③ Precious metals trading and sales department: 'Retail investors in China and India drove up prices'
'Recent price increases have been driven by speculative demand and physical buying from China and India. It is particularly rare that China has increased gold imports at historical highs. However, the price increase has been too rapid, and volatility triggered stop-loss orders. We believe that $4600 per ounce may become a support level.'
3. 'Plunge? Instead, it's an opportunity'... The 'buying frenzy' outside global gold shops
As Wall Street institutions cut positions and panic, retail investors go against the tide. According to reports from Bloomberg and other foreign media, long queues formed outside gold shops in major Asian cities waiting to buy at lower prices.
Singapore: The UOB (United Overseas Bank) branch providing physical gold services is crowded. A 70-year-old investor said, 'Prices have dropped, so I'm here to buy,' and waited in line for 6 hours, while the bank posted a notice stating 'All queue numbers have been issued.'
Sydney, Australia: A long queue formed outside ABC Bullion. A young investor in his 20s said, 'I lost a lot of money on Friday, but the sun will rise again tomorrow,' and made additional purchases.
Thailand & China: Thai investors tend to hold rather than sell gold, and there has also been a flow of funds into buying on dips in China before the Spring Festival. Precious metals traders in Shenzhen said, 'Many buyers looking to buy on dips have flooded in over the past two days.'
4. Outlook: 'Trump risk & currency depreciation trend remains'
The long queue of individual investors 'snapping up bargains' is based on the belief that the fundamental reasons for the rise in gold prices still hold. ▲ Unpredictable risks from Trump's government policy ▲ The demand for hedging against currency depreciation has not disappeared.
This optimistic sentiment is also confirmed in Deutsche Bank's latest report. In a memo on Monday, Deutsche Bank reaffirmed its bullish outlook, stating that 'Gold prices will eventually reach $6000 per ounce.'
[TokenPost viewpoint]
'Institutions flee due to fear of 'volatility,' while the public queues up believing in 'value.' In the short term, support around $4600 is crucial, but unless the macro trend of currency depreciation changes, this plunge may be recorded as a historic buying opportunity.'