When the music stopped, investors scrambled for the exits. Following consecutive surges, international gold and silver prices experienced significant volatility this week. Dragged down by this trend, renminbi-denominated gold, platinum, and palladium prices plummeted sharply—market movements resembling a “bungee jump.” Does this collective correction in precious metals signal an impending turning point? What signals are emerging from this market turbulence?

Gold and Precious Metals Market Witnesses Another “Bungee Jump”

The precious metals market at the end of 2025 is both thrilling and unsettling. Particularly over the past month, as gold prices resumed their upward trajectory after earlier consolidation, other precious metals like silver and platinum surged collectively, “overtaking the front-runners.” Silver futures, for instance, surged from around $50 per ounce to above $80 per ounce, consecutively breaking through the $60, $70, and $80 psychological barriers. Its monthly gain reached a multi-year high.

Compared to silver, platinum's “frenzy” has been even more intense. In just three weeks, London spot platinum prices surged from above $1,640 per ounce to nearly $2,450 per ounce—a nearly 50% increase—pushing its year-to-date gains to over 150% at one point.

The explosive short-term rallies in silver and platinum have overshadowed even gold's sustained upward trajectory. Data shows that since the start of the year, international gold prices have risen by about 65%, while silver and platinum have surged by over 150% and 70% respectively during the same period. However, just as global investors were anticipating gold prices to hit $5,000 and silver to break through $100, the market suddenly plummeted, catching many investors off guard.

During the opening week of 2025, international gold and silver prices experienced significant intraday volatility. On the 29th, silver fluctuated by over $10 per ounce, while platinum and palladium plunged by approximately $300 per ounce. Affected by this, domestic platinum and palladium futures prices hit the daily limit-down in late trading. Currently, the spot gold price denominated in renminbi has fallen below CNY 1,000 per gram, while major gold retailers have reduced their gold jewelry prices by approximately CNY 50 per gram over the past two days.

The steep decline in gold and precious metal prices stems primarily from accumulated profit-taking after earlier market rallies, reduced geopolitical risks, and risk control measures implemented by major exchanges, prompting some investors to close positions before the holidays. Earlier, the Chicago Mercantile Exchange announced a comprehensive increase in margin requirements for multiple metal futures, including gold and silver, effective after the market close on December 29. The Shanghai Futures Exchange also announced an increase in margin standards and price fluctuation limits, effective at the close of settlement on December 30.

Turning Point? Industrial and Financial Attributes Still Underpin Prices

Looking back at major financial asset markets in 2025, while tech stocks and copper delivered standout performances, gold and precious metals remained the shining stars. The sharp pullback following an unexpected rally has led many investors to wonder: Is the gold and precious metals market approaching a turning point? In the current environment, does gold still serve as a “safe haven”?

Gold's 2026 performance hinges on the interplay of multiple variables. According to the World Gold Council's outlook report, the gold market will experience varying degrees of fluctuation in 2026 under different scenarios. However, in most cases, gold prices are projected to rise moderately or remain stable. Only in an environment where inflation returns might international gold prices see a certain degree of correction.

The recent market pullback remains largely a technical correction following an earlier rapid ascent. Many industry experts note that the financial and safe-haven factors underpinning precious metals' strength show no signs of weakening. For instance, regarding central bank purchases, the World Gold Council's latest survey indicates that 43% of surveyed central banks plan to increase gold reserves over the next year. The soaring gold price has not deterred central banks, indicating that the true objective of global central banks is to pursue reserve diversification rather than short-term investors.

Unlike gold, other precious metals such as silver and platinum also have strong physical demand support. “Silver was once called gold's ‘affordable alternative,’ but under the green and low-carbon transition, its industrial demand will be stimulated,” said Cheng Wei, a seasoned precious metals investor. According to estimates from some research institutions, solar photovoltaics, new energy vehicles, and artificial intelligence are emerging as the three major ‘engines’ driving silver demand growth. Additionally, platinum is transitioning from its traditional role as a “jewelry and catalyst commodity” to an “energy transition metal.”

Multiple Signals Behind the Rollercoaster Ride

The dramatic swings of sharp rises and falls have exposed many investors to the volatility of the gold and precious metals market, while also signaling several key developments that market participants should heed.

First, the role of gold and precious metals has undergone significant transformation. Particularly in the gold market, both the U.S. dollar and gold were once regarded as safe-haven assets, competing for that status. The well-known “see-saw effect” between the dollar and gold persists. However, amid rapidly rising U.S. debt levels and growing concerns over fiscal sustainability, investors are reassessing gold's hard currency value. While the dollar remains the primary settlement and pricing currency in international trade and the world's dominant reserve currency, it is no longer universally regarded as a “safe haven” by investors.

Secondly, no market rises indefinitely. Even as gold and precious metals gain market favor, caution remains essential when chasing high prices as an asset. Numerous factors influence the gold market, including economic conditions, policy shifts, and sudden conflicts. As a widely accepted investment, gold prices reflect multifaceted changes. Elevated market sentiment cannot sustain perpetual upward momentum; once key factors unfold below expectations, rapid price swings become inevitable.

Investing in gold is not a surefire way to profit. Historically, the gold market has been characterized by significant volatility and extended cycles. In fact, the current upward trend only began at the start of this century, following nearly two decades of low-range consolidation.

Finally, the gold and precious metals market is increasingly becoming a “capital-driven market,” with prices increasingly serving as a “display screen” for sentiment. Industry experts note that while supply-demand dynamics remain a narrative driving future price movements, capital flows and investor sentiment have become increasingly decisive factors. Such “bouncing” market patterns may not be exceptional.

Experts emphasize that for investors, the key lies in selecting appropriate investment products. The recent rapid surge in silver prices, fueled by arbitrage strategies exploiting the high premium of SDIC Silver LOF circulating on social media platforms like Xiaohongshu, allowed many participating investors to “reap some gains.” However, the subsequent plunge from high premiums to consecutive limit-down days served as a stark lesson in risk management. “For ordinary investors, the hotter the trend, the more rational and cautious they should be,” emphasized Gu Fengda, Chief Analyst at Guosen Futures.

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