Gold and silver prices sharply dropped then surged straight up. Why are precious metals "fluctuating wildly"? | Homebody Finance

【Otaku Finance | Experts Face to Face】 On the morning of the 27th, after international gold and silver prices saw a sharp drop, they then surged straight up. Spot gold is up 1.26%, trading at 4437.225 USD, and spot silver is up 1.67%, at 69.224 USD. Since hitting this year’s high on January 29, both gold and silver prices have been fluctuating; gold has fallen 21%, while silver has fallen 44%.

Wenhu Wang, an analyst at the Hongyuan Futures Research Institute, said that Iran has blocked the Strait of Hormuz, with production cuts across many countries in the Middle East. Concerns about a rebound in inflation on the consumption side have been rising, and the Federal Reserve and major countries’ central banks such as the U.S.’ European and U.K. peers have turned more hawkish in monetary policy. As a result, prices of precious metals have come under pressure, but expectations of gold purchases still exist among central banks across countries. The London silver 1-month borrowing rate is 0.629%, and it remains at a low level, indicating relatively loose supply-and-demand expectations. On January 27, 2026, the London “gold-silver ratio” fell to 45.4, far below the 10% percentile of 72.98 over the past five years, showing that the earlier price increase in silver was far larger than that of gold.

Therefore, Wang Wenhu believes that, from the perspective of repairing the “gold-silver ratio” driven by arbitrage, silver’s price decline is likely to be greater than gold’s.

**　　(The views expressed in the article are for reference only and do not constitute investment advice. Investing involves risk; enter the market with caution.)**

(Editor: Song Yafen; Producer: Intern Liu Nian; Responsible editor: Yuan Yuan)