1. Review – Between Euphoria and Disillusionment
Starting in late October, another rally began in the silver market – and from mid-December, also in the gold market – which accelerated spectacularly again in the first weeks of the new year. From USD 4,180, the gold price gained 34% within just seven weeks, reaching a new all-time high of USD 5,602 on Thursday, January 29. Silver, starting from its short-lived pullback to USD 45.51 at the end of October 2025, surged by a massive 167.2% within three months, even rising to USD 121.67.
Gold/Silver Ratio, weekly chart as of February 18, 2026. Source: Tradingview
Especially after the spectacular and increasingly steep rise of the silver price to over USD 121, a short-term overheating was obvious. Consequently, the market’s gravity did not take long to assert itself, and a sharp correction wave followed within a very short time from the end of January. The gold price was thrown back by USD 1,200 to USD 4,400 within just two trading days. Silver corrected particularly hard, losing around -43% in two waves down to a low of USD 64.03 within one week. These sharp pullbacks confirm the typical pattern of speculative overshooting. Triggers included not only excessive profit-taking and an utterly exaggerated market euphoria but also targeted interventions in the futures markets and drastic margin increases on COMEX.
In an initial reaction, precious metal prices have recovered significantly from their lows over the past two and a half weeks, which has also somewhat stabilized market sentiment. However, volatility remains extremely high, and silver clearly lags behind the gold price. The gold/silver ratio has turned, initially suggesting an outperformance of gold against silver.
Overall, the past six months in the precious metals markets have been characterized by a wild roller coaster ride. This time, the cycle of euphoria, overshooting, and abrupt correction was particularly extreme. While geopolitical tensions, global debt problems, and monetary policy uncertainty fueled demand for safe havens and led to historical price movements, the price turbulence due to profit-taking since late January caused a significant dampener.
Despite the high fluctuations, the fundamental conditions and drivers of the gold bull market have hardly changed. Inflation, high government debt, and more restrictive monetary policies by central banks continue to create a field of tension in which investors seek real stores of value. The price discovery system has increasingly shifted to Asia – particularly to Shanghai – where physical premiums now significantly influence the global market price. There, bottlenecks in the physical silver market remain high, which holds the potential for renewed price surges.
Against this backdrop, the central question arises: Is the recent correction a healthy consolidation within a long-term bull market – or was the precious metals’ surge merely the result of short-term liquidity flows and exaggerated speculation?
2. Chart Analysis Gold in US Dollars
2.1 Weekly Chart: Weekly Stochastic with Sell Signal
Gold in US Dollars, weekly chart as of February 18, 2026. Source: Tradingview
Since the prominent triple bottom at USD 1,615 in autumn 2022, the gold price has risen to USD 5,602 – an impressive gain of 246.7%. However, this enormous increase over approximately three and a half years has taken its toll. It is also important to note that the silver price only really gained momentum in the last few months of this upward movement. This supports the assumption that the new all-time high in the gold market at the end of January probably represents a more significant interim high within the secular bull market. After all, silver tends to shine in this way only towards the end of an upward cycle.
After the gold price temporarily traded well above its Bollinger Band (USD 5,147), prices have fallen back significantly. However, the middle Bollinger Band has cushioned the sell-off well so far. The weekly stochastic has activated a sell signal, and it could take several weeks for the oscillator to reach its oversold zone after this overshooting. Nevertheless, the gold price remains steadfast and continues to move wildly around the psychological mark of USD 5,000.
The weekly chart appears slightly bearish overall and indicates a corrective movement. In the best case, the pattern of the last two years repeats: the low point was already reached at USD 4,402, followed by a consolidation around USD 5,000 in the coming weeks or months before the next upward phase begins. Alternatively, a somewhat larger pullback may be necessary this time, with possible price targets around USD 4,000.
2.2 Daily Chart: Rising 50-Day Line as Important Support
Gold in US Dollars, daily chart as of February 18, 2025. Source: Tradingview
After weeks of spectacular ascent to USD 5,602, the sharp correction to USD 4,402, and the moderate recovery to USD 5,116, the daily chart has recently clouded further. The prominent reversal formation was followed by a lower high at USD 5,116, from where the gold price has again fallen significantly in recent days.
However, the bulls have not given up the fight for the USD 5,000 mark; instead, they are pushing upwards again despite the absence of Chinese traders. Should gold fail here again, the rising 50-day line (USD 4,652) comes into focus as a possible target. The lower Bollinger Band (USD 4,648) also acts as support there. Both supports move upwards daily, so there is a good chance that the higher low of February 2 at USD 4,655 will not be undercut again. Accordingly, the consolidation or correction could play out in a triangle.
In summary, the daily chart remains neutral to bearish. The daily stochastic still has room to the oversold zone. Momentum is downward and not really picking up. Especially during the Chinese New Year celebrations, no major upward movements are to be expected. Only around USD 4,700 to USD 4,750 could a good buying opportunity arise. Nevertheless, a larger recovery movement would have room up to the upper Bollinger Band (USD 5,344).
3. Futures Market Structure Gold
Commitments of Traders Report for Gold Futures as of February 10, 2026. Source: Sentimenttrader
Even though the Anglo-Saxon futures and paper gold market has lost control over gold price discovery in recent years due to strong physical demand from Asia, the weekly Commitments of Traders Report (COT Report) from the US Commodity Futures Trading Commission (CFTC) consistently offers important insights into the positions of major market participants in the gold market. Moreover, particularly in the silver market two and a half weeks ago, it was clear that major players can still steer prices in the desired direction, at least in the short term, via the paper market.
According to the current report as of February 10, commercial traders held a cumulative short position of 197,739 gold futures contracts at a closing price of USD 5,052. In a long-term comparison, this commercial short position is still significantly too high. However, over the past weeks and months, the short position has shrunk considerably. This means that bullion banks, hedgers, and producers have significantly reduced their short positions during the price decline.
Truly good contrarian entry points or turning points in the past were usually only found with a cumulative short position below 100,000 contracts. However, momentum is now favorable, and we would say that the futures market traffic light could turn green again in the range of around 150,000 contracts, given the overall situation.
Overall, based on the last 22 years, the CoT report is provisionally to be interpreted as rather negative.
4. Gold Sentiment
Sentiment Optix for Gold as of February 17, 2025. Source: Sentimenttrader
Since the spring of 2024, sentiment data for the gold market has repeatedly indicated significant overheating. Each time, a “cold shower” in the form of a sharp pullback ensured that the situation was defused, allowing gold prices to continue their overall upward trend.
Two and a half weeks ago, the Sentiment Optix index again reported highly exaggerated optimism values. As often happens, a sharp and violent pullback followed, cooling down the heated sentiment in the gold market within a few days. Now it will be exciting to observe whether sentiment can stabilize around the 60 level – or whether a real panic will be necessary this time to lay the groundwork for the next rise.
In summary, sentiment is currently in the neutral range with an Optix value of 64. Ideally, the Optix will soon turn upwards again above 55. Otherwise, the probability of an extended correction increases significantly.
5. Gold Seasonality
Seasonality for the gold price over the last 17 years as of September 8, 2025. Source: Seasonax
Retrospectively, the gold price began its next upward wave from mid-December as expected. After the spectacular rally, however, the new all-time high on January 29 and the resulting turning point occurred significantly earlier than seasonal patterns would normally suggest.
Nevertheless, the precious metals sector is still in a favorable seasonal phase, which typically provides tailwinds until March and April. In this respect, there is a good chance that the gold price will at least stage a decent recovery rally in the coming two months.
Significantly higher all-time highs cannot be derived from the seasonal component until early summer, as the window of opportunity is slowly but surely becoming too small for that. This means either the gold price recovers indirectly to around USD 5,150 to USD 5,350 by April/May and consolidates around and above USD 5,000 until mid-summer, or another attack on the next psychological mark at USD 6,000 succeeds. However, the next contrarian buying opportunity from the seasonal component will only arise again between June and August.
Overall, the seasonal traffic light is green until at least March.
6. Macro Update – Global Power Shift
The global economy is currently experiencing its biggest upheaval in decades. While China, as an aggressive architect, is driving a new order, the USA is sinking into a phase of internal instability and division. Ongoing budget disputes with government shutdowns, intra-party rifts under Trump, as well as corruption allegations, arbitrary dismantling of agencies, controversial tariffs, foreign policy isolation, and a deficit explosion to over USD 34 trillion are burdening the US administration’s capacity to act, while the midterm elections on November 3, 2026, threaten the Republican majority.
China’s AI Dominance
China, on the other hand, is currently implementing the most ambitious industrial policy since the Marshall Plan. Last weekend, for example, five Chinese AI companies – Zhipu, ByteDance, Alibaba, Moonshot, and DeepSeek – simultaneously announced significant model upgrades, with these Chinese AI systems costing only about one-sixth to one-quarter of the cost of US systems. Meanwhile, the US is discussing new tariffs and has pumped USD 380 billion into AI infrastructure with no measurable return.
China is not merely replicating but actively replacing the Western “tech stack.” The “Four Dragons”—Moore Threads, MetaX, Biren, and Enflame—recently went public or became IPO-ready; Huawei is doubling production of its Ascend chip to 600,000 units annually and plans to overtake Nvidia. Bernstein predicts that Nvidia’s market share in China will plummet from 40% to 8% due to export restrictions, while Huawei could reach up to 50%. Furthermore, Beijing is mobilizing $70 billion for chip subsidies and has mandated state telecommunications firms to replace AMD and Intel components by 2027.
Energy Transition as a Growth Engine
China is also strategically and long-term advancing in the energy sector, aiming for global leadership. Last year, approximately USD 1 trillion was invested in clean energy. This is four times more than in fossil fuels. These investments are estimated to have driven about one-third of GDP growth. China generates one terawatt of solar capacity annually, dominates with 70 percent of global EV production, and has almost half of all new cars running as electric vehicles. This allows it to power its own AI data centers with low-cost renewable energy. The US, however, continues to debate wind subsidies, while China alone installed 277 gigawatts of solar in one year.
Gold as a Strategic Reserve
China’s Gold Reserves, as of February 15, 2026. Source: @cryptorand
China also remains consistently true to its long-term strategy in the financial sector. The Chinese central bank (PBoC) has been continuously buying gold for years. In January, official gold reserves increased by another USD 51 billion to USD 369.6 billion. However, the World Gold Council estimates the PBoC’s actual holdings to be twice as high.
Beijing is also diversifying the pricing of commodity markets by expanding its gold reserves to an official 2,308 tons of gold and extending Renminbi-based gold contracts via the Shanghai Gold Exchange. Yuan trade with countries like Saudi Arabia, Brazil, and Indonesia is growing rapidly, supported by record exports of USD 3.77 trillion and a surplus of USD 1.19 trillion.
US Treasury Reduction
Chinese holdings of US Treasury bonds, as of February 16, 2026. Source: Bloomberg, US Department of the Treasury
At the same time, China has significantly reduced its holdings of US Treasuries from USD 1.32 trillion to now USD 683 billion. This represents the lowest level since 2008 and only 7.3% of total holdings. In 2011, the share of US Treasury bonds was still 28.8%! The trend is clear: China is consistently diversifying from US Treasuries to gold.
However, the narrative of de-risking and a post-dollar world ignores Beijing’s desperate liquidity management amidst 11 quarters of GDP deflation, 40 months of negative producer prices, a bitter real estate crisis eroding domestic demand, and ongoing capital flight. US Treasuries are thus being divested to support the Yuan, manage liquidity, and avoid Russia’s fate – frozen foreign assets overnight.
Energy Dollar Trap
Yet, the inescapable chain remains, as China cannot free itself from dollar-based energy imports! China imports approximately 11 million barrels of crude oil daily, covering about 70 percent of domestic consumption. LNG imports are expected to rise to about 140 million tons annually by 2030, as China moves away from coal for air quality and CO₂ reduction reasons.
However, almost all of these hydrocarbon imports are settled in US dollars. While China has negotiated some Yuan deals with Russia, these cover less than 20 percent of total imports. The rest – Saudi crude, Iraqi crude, Angolan crude, US LNG, Qatari LNG, Australian LNG – is invoiced in US dollars. Therefore, the US dollar remains essential for China’s energy transition. China is caught in a trap whose bars consist of methane and crude oil molecules flowing through pipelines, terminals, and tankers, all settled in US dollars.
China is shifting its investments from US Treasury bonds to gold. Source: Giacomo Prandelli
China’s reduction of US Treasuries therefore does not prove dollar weakness, but rather underscores how urgently and carefully Beijing must manage an economy in which the US dollar remains unavoidable.
Dollar Dominance through Infrastructure
Accordingly, China can hoard as much gold as it wants and print Yuan swap lines with Argentina or Saudi Arabia for headlines – but as soon as an LNG ship docks in Ningbo or a crude oil tanker arrives in Qingdao, the bill comes in US dollars.
The US, on the other hand, not only produces energy but also controls its global flows, thereby enforcing a sustainable dollar dominance that the deep US Treasury markets are unable to provide. US control over global energy flows is further supported by its own energy surplus, as well as military supremacy and deep US financial markets.
China’s sale of Treasuries therefore primarily serves liquidity management, not to trigger a US dollar collapse. The US, instead, employs Quantitative Easing and fiscal dominance as a response to its demographic shrinkage and gigantic mountains of debt.
Gold: Eternal Anchor in the AI Age
Central Bank Gold Reserves, largest changes 2020-2025, as of February 15, 2026. Source: mining.com
All these developments remain sustainably bullish for the gold price, as not only China’s central bank but also Poland, Turkey, and India are continuously increasing their gold reserves significantly, thereby creating a structural price floor. Although the rally recently failed at a significant high point of USD 5,602, gold remains the central safe-haven position amidst global power shifts, geopolitical tensions, and ongoing central bank purchases that support the price long-term.
In the future, robots and AI will shape our lives. At the same time, demographics and debt will curb organic growth, while capital will flow into software and networks. True values will gain importance: intelligence will decouple from human labor, autonomous AI agents will replace traditional demographics and enable growth without population increase or jobs. Meaning will become the scarcest resource, creativity and genuine connections will move to the center, while machines optimize intelligence – and people will hopefully and ideally dedicate themselves to their lives again.
Gold proves to be an indispensable anchor here, because while fiat currencies are devalued by exponentially growing mountains of debt and algorithmically generated liquidity, gold remains the only asset that cannot be arbitrarily multiplied.
Its scarcity is geologically enshrined – not politically negotiable and not re-writable by code. In a world where almost every form of scarcity is dissolved by autonomous agents and exponential computing power, the artificial absence of scarcity becomes the central risk.
Gold reverses this logic: it is scarcity by definition. The more wealth becomes intangible, networked, and replicable, the more balance sheets and psyches long for an anchor that lies outside the digital control sphere – physical, decentralized, ancient, and future-proof. Gold is thus not only a store of value from the past but also a forward-looking shield against the devaluation dynamics of a post-demographic, hyper-productive, but inflation-prone civilization, as well as the unshakeable rock in geopolitical turbulences.
7. Conclusion: Gold – Euphoria, Crash, Consolidation
Once again, the wild roller coaster ride of precious metals shows the typical dynamics of speculative overheating followed by a healthy correction within a secular bull market. Even if the silver price, in particular, has been brutally crushed, we see no reason whatsoever to declare the end of the overarching upward movement.
On the contrary, the lows may have already been seen in the best case, and the gold price could easily recover to around USD 5,350 by late spring. Alternatively, the correction could drag on a bit longer and more stubbornly. However, prices significantly below USD 4,000 are currently statistically and structurally unlikely.
While chart analysis currently suggests a further sideways or slight downward phase, the fundamental drivers form an almost indestructible foundation: Asia’s insatiable hunger for gold, persistent physical supply bottlenecks, geopolitical power shifts, and strategic purchases by major central banks (foremost China) sustainably support the long-term trend. Added to this is the seasonal tailwind, which traditionally provides noticeable upward momentum until April.
In an era of global power shifts – China’s systematic gold accumulation, AI-driven productivity explosion, energy transition, and simultaneous structural instability in the US dollar area – gold remains the ultimate, non-replicable anchor of real value preservation.
Its geological scarcity paradoxically gains dramatic relevance in a world where almost every other form of scarcity is dissolved by exponential computing power and autonomous AI agents. Where meaning and genuine, unadulterated connections become the scarcest resource, physical gold advances to a shield against the devaluation dynamics of a hyper-productive but fiat-inflation-prone civilization.
The dollar-energy trap continues to bind even strategic players like Beijing to the realities of the fiat system – and paradoxically reinforces gold’s protective and diversification function. Precisely for this reason, a clear overweighting of precious metals in the portfolio remains justified.
Disciplined investors remain fully invested physically and use every genuine pullback for what it is – a rare buying opportunity offered by the market in an intact secular uptrend. We already see the next buying opportunity in the range of USD 4,700 to USD 4,750.
