7 Shocking Facts: China’s Gold-Silver Rally Collapses in a Day, Prices Plummet by 26%

Jakarta, Pintu News – The once seemingly unstoppable surge in gold and silver prices finally collapsed within hours. Global markets suddenly reversed course as speculative euphoria turned into aggressive selling. The event was a highlight as it showed how fragile commodity rallies can be when momentum trumps fundamentals.

China Speculation Drives Outrageous Rally

In the weeks prior to the crash, the global metals market was moving seemingly regardless of the logic of supply and demand. Gold, silver, and copper surged sharply due to huge speculative flows that many attributed to investor activity from China. These extreme movements made market participants in Europe and America adjust their working hours to monitor the Asian session.

In the physical market, the euphoria was evident through a surge in retail demand. Precious metal producers are working near maximum capacity, while some bar sizes are reportedly booked out weeks in advance. Long queues at precious metals stores show that this rally is not just happening on the trading screen, but is spilling over into real life.

Also Read: 7 Ethereum (ETH) 2026 Price Predictions: Bullish Targets, Risks & Projections

Rally turns into a momentum game

A number of fund managers felt that the rally had turned into a game of speed, rather than a fundamental assessment. Many market participants are simply riding the trend while waiting for the moment of reversal. The narrative driving the buying was layered, ranging from central bank independence issues to global geopolitical tensions.

The market structure magnifies volatility, especially in silver where the market size is relatively small. Silver’s annual supply value is estimated to be around USD 98 billion (IDR 1,645 trillion), far below that of gold which stands at around USD 787 billion (IDR 13,209 trillion). This imbalance makes silver price spikes and crashes much more extreme.

High Prices Peak, Then Collapse Suddenly

The euphoria reached its peak when gold touched USD 5,595 per ounce or around IDR 93.9 million. Silver even broke through USD 121 per ounce or around IDR 2.03 million, while copper had reached USD 14,527.50 per ton or around IDR 243.9 million. This level is considered by many analysts to be too far out of line.

Signs of a reversal appeared as the dollar strengthened and gold prices fell by more than USD 200 in just a matter of minutes. Sentiment changed quickly after news of the planned appointment of a new US central bank chairman triggered dollar strength. Investors in China are said to have chosen to lock in profits, so the buying flow that sustained the rally suddenly dried up.

The One-Day Crash that Triggered Market Panic

On Friday, silver plummeted by 26% and recorded the deepest daily decline in modern history. Gold was dragged down by around 9%, becoming the sharpest fall in more than a decade. The sell-off spread quickly and turned into one of the harshest commodity crashes in a short period of time.

Volatility was exacerbated by the previously soaring activity in derivatives and options. Transaction volumes of silver-based products increased many times over, while stories of thousands of percent gains circulated widely on online forums. When prices reversed, the hedging effect accelerated the selling pressure.

Important Lessons for Investors

The one-day fall confirms the fragility of the rally that was underpinned by speculation, leverage and a momentum boost. While there has been no major panic in the physical market and premiums are still holding up, the next direction depends heavily on the flow of funds from China. This episode serves as a reminder that when momentum supersedes fundamentals, price reversals can come without warning.

Also Read: 7 Gold Price Predictions for February 2026: Rise, Scenarios & Risk Factors!

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Reference

• Cryptopolitan. How the gold and silver rally built on Chinese speculation collapsed in one day. Accessed February 2, 2026.