Gold & Silver Crash: Lunar New Year’s Liquidity Crisis?

Gold and silver markets are in a sharp correction, with prices falling for a second consecutive session. Commodity-based exchange-traded funds (ETFs) are also declining by as much as 4%.

The sudden downturn has erased an estimated $1.28 trillion in combined market value, reflecting how even traditional safe-haven assets remain vulnerable to macro shocks and liquidity shifts. Because nothing says “safe” like watching your investments cry in a corner.

Lunar New Year Liquidity and Macro Pressures Fuel Gold and Silver Correction

The decline follows a powerful rally earlier in 2026 that pushed gold above $5,000 per ounce and drove silver to record highs. Because nothing says “I’m feeling lucky” like a 40% drop from a record high.

Analysts now say the pullback reflects a mix of seasonal factors, macroeconomic pressure, and profit-taking after an extended run-up. Or, as I like to call it, “The Great Financial Hangover.”

Silver has been hit particularly hard, falling nearly 40% from its all-time high (ATH) of $121.646 recorded in late January. Silver, the drama queen of the metal world, has taken a 40% nosedive. What’s next? A comeback? Probably not, but we can dream.

JUST IN: Silver price down 40% from record high.

– Whale Insider (@WhaleInsider) February 17, 2026

As of this writing, Silver (XAG) was trading at $74.11, reinforcing its reputation as a more volatile counterpart to gold, given its smaller market size and stronger industrial demand. Because nothing says “I’m stable” like being a smaller market with more industrial demand.

“Gold and Silver wiped out $1.28 trillion today… even ‘safe havens’ bleed,” wrote one analyst, emphasizing the speed of the decline and the risks of assuming stability in any asset class. Because if you think you’re safe, you’re doing it wrong.

Others pointed to the role of market structure and liquidity, arguing that temporary dislocations may occur when key physical markets slow, particularly in Asia. Because nothing says “I’m reliable” like Asian markets taking a break.

Lunar New Year Liquidity Effects Come into Focus

Against this backdrop, one of the most widely cited short-term drivers is the Lunar New Year holiday period, during which trading activity across major Asian financial centers declines sharply. Because nothing says “I’m busy” like a holiday.

Mainland China, Hong Kong, Singapore, Taiwan, and South Korea all experience reduced participation as traders, manufacturers, and market makers step away. Because even the financial world needs a vacation.

Lower liquidity can amplify price movements in global futures markets, especially for commodities like silver, where physical demand from the Chinese industry plays a major role. Because if you’re not in the market, you’re just a spectator.

Weaker demand during the holiday period could temporarily pressure prices, with physical buying potentially resuming once factories and exchanges return to full activity. Because nothing says “I’m patient” like waiting for factories to reopen.

Analysts Warn of Continued Volatility As Macro Pressures Weigh on Bullion

Beyond seasonal factors, broader macroeconomic developments are also contributing to the downturn. Precious metals came under pressure as investors focused on narratives that strengthen the US dollar in the short term. These include:

• Signals from the US Federal Reserve and
• Geopolitical developments, including US-Iran negotiations

A firmer dollar typically weighs on bullion by making gold and silver more expensive in other currencies, reducing demand from international buyers. Because nothing says “I’m affordable” like a weak dollar.

ETF flows reflect the cautious sentiment. Several gold and silver ETFs declined between 2% and 4%. This mirrors weakness in futures markets and suggests that some investors are locking in profits after the recent rally. Because nothing says “I’m smart” like cashing out early.

Meanwhile, market strategists say precious metals are now in a “volatile consolidation phase.” After such a strong advance, corrections and sideways trading are common as markets digest gains and rebalance positions. Because nothing says “I’m predictable” like a correction.

Therefore, a disciplined approach may be advisable, rather than chasing prices at elevated levels; instead, consider staggered buying during corrections. Because nothing says “I’m disciplined” like buying during a correction.

Technical analysis also shows key support levels, with estimates placing silver price support near $65 per troy ounce and gold support around $4,770 per ounce on a weekly closing basis. Because nothing says “I’m confident” like technical analysis.

While these levels could determine whether the current pullback stabilizes or deepens, investors should conduct their own research. Because nothing says “I’m responsible” like doing your own research.

Despite the sharp drop, structural forces such as rising global debt, currency debasement, and historical cycles in ratios, such as the gold-silver ratio, could support a powerful long-term bull market in precious metals. Because nothing says “I’m optimistic” like rising global debt.

If historical ratio reversals repeat, silver could experience significant upside over the coming decade, potentially reaching dramatically higher price levels by the early 2030s. Because nothing says “I’m hopeful” like historical ratio reversals.

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2026-02-17 16:19