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Money Metals News Alert
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February 2, 2026
– Gold and silver both sold off on Friday in a correction that was overdue.
Gold kicked off last week trading just
over $5,020. As the week went on, the price soared, topping above $5,600 before
crashing back below $5,000 on Friday.
Even with the huge selloff, gold is
still up almost 10 percent since the beginning of the year!
Meanwhile, silver went on a similar
wild ride, topping over $120 before crashing below $80. It trades in a range above
$80 today.
Even with the selloff, silver is still
up almost 15 percent since the beginning of the year!
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Gold : Silver Ratio (as of
Friday's closing prices) – 56.9 to
1
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Six Key Takeaways From the Precious Metals
Selloff
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Here are some thoughts from Money
Metals analyst Mike Maharrey regarding the sell-off. Perhaps this will help when
the next correction occurs (and there will be more corrections).
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Keep Things in
perspective – Yes, it was a big selloff. But as I already mentioned,
gold and silver were only down modestly on the week, and both metals are up
significantly since the beginning of the year.
Think about it –
people were panicking because gold fell below $5,000. This time last year, $5,000
was still far off on the horizon. And $80 silver? Last year, people wondered if it
would ever get to $50.
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Corrections are normal and
healthy in a bull market – Nothing goes up in a straight line. As I
mentioned, we were probably overdue for a correction given the speed of the most
recent rally.
Both metals were overbought. (a
technical term meaning an asset???s price has risen high enough, fast enough, based
on a predefined quantitative indicator that makes it statistically stretched to
the upside relative to its recent history.) Corrections clear out weak hands, and
they create buying opportunities.
Keep your eye on the
fundamentals – when you see a big sell-off, ask yourself, ???What???s
changed? Are the dynamics that sparked the bull market still in place???? If
something fundamental has changed, you should reexamine your position.
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Everything dumped Friday
– You shouldn???t look at the precious metals market in isolation. What else
is happening in the broader marketplace? On Friday, everything was sold.
Stocks were down. Bonds fell modestly.
Commodities fell. The only thing that charted a gain was the dollar. That raises a
question: Do you trust the long-term prospects of the dollar?
You haven???t lost money unless
you sell – Ironically, I calculated my silver gains on Thursday. As
some of those gains evaporated on Friday, I caught myself telling my wife we were
???losing money.??? But I didn???t lose a dime because I didn???t sell. Yes, I took some
paper losses, but given that I bought quite a bit of silver at $12, I wasn???t
losing money, even on paper.
This demonstrates how easy it is to
get caught up in emotion. Never let emotion drive investing decision. As I already
said, maintain perspective!
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It???s not always
???manipulation??? – Whenever gold or silver sell off significantly,
people start speculating about market manipulation. But I never hear about
manipulation when prices rise wildly.
Here???s the reality –
prices swing. Sometimes they swing wildly, both up and down. I???m not saying
manipulation doesn???t happen.
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I???m simply pointing out that a big
price drop doesn???t ???prove??? they are manipulating the market. There are other
explanations that undeniably play a role, such as leverage, profit taking,
risk-off controls, and momentum.
Sell-offs are scary. They???re
unnerving. And they are inevitable.
Could this be the beginning of the end
of the gold and silver bull markets? Certainly. But I don???t think it is, for
reasons I have been hammering on for months. I think we???re in the early stages of
a secular bull market.
However, we should constantly
reevaluate the situation with the information at hand. Markest do turn. And we
should always remain humble. If we aren???t, the market will humble us! There are
many factors working together to move markets up and down.
The key is to stay calm, avoid
emotional decisions, and constantly evaluate the fundamentals.
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This week's Market Update was
authored by Money Metals Director Clint Siegner.
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