Gold & Silver: China Sets Price Direction After Historic Sell-Off

Investors are closely watching the Shanghai Stock Exchange’s reopening tonight, Sunday, to gauge whether Chinese demand for gold and precious metals can rebound after a historic sell-off—largely driven by Chinese speculators, according to Bloomberg. The pullback ahead of Chinese New Year—a traditional buying season (typically falling between Jan 21–Feb 20)—may offer a strategic entry point for retail investors who missed the earlier rally. In Shuibei, a major gold trading hub, silver pressure has eased slightly, with more sales than purchases recorded over the weekend, traders report—though no panic selling is evident, and Shuibei silver still trades at a premium versus exchange contracts. As retail interest surges, several Chinese banks announced new risk controls Friday: China Construction Bank will raise minimum deposit amounts starting Monday and urged investors to exercise greater caution, while ICBC will impose quota controls on its Ruyi Gold Savings service during the holiday. “Gold remains relatively strong—we’ve seen many buyers purchasing jewelry and bars ahead of Lunar New Year,” said Liu Shunmin, Head of Risk at Shenzhen Guoxing Precious Metal Co. “For silver, there’s a strong tendency for investors to stay on the sidelines.” Silver hadn’t breached $40/oz in a decade—yet surged over 100% in months, peaking at $121.64/oz this year before collapsing sharply Friday. For weeks, global metal traders watched prices—gold, copper, tin—spiral uncontrollably, defying fundamentals and propelled by speculative capital inflows from China. Then, within hours, the rally reversed into one of the most dramatic commodity sell-offs ever recorded.