11:43 pm - February 4, 2026
Wall Street is experiencing significant turbulence as precious metals markets face sharp volatility, bitcoin hovers near multi-month lows, and technology stocks generate lingering concerns among investors. Traders are grappling with sudden reversals in what had been the hottest trades of the past year, raising questions about speculative excess across multiple asset classes.
Gold surged to a record high above $5,550 per troy ounce on Wednesday before plunging 11% on Friday, according to market data. Silver experienced an even steeper decline, dropping 31% in the same session. Gold early Monday fell as low as $4,423 before recovering to trade around $4,680 by afternoon.
Bitcoin Struggles Amid Precious Metals Volatility
Meanwhile, bitcoin tumbled over the weekend from above $83,000 to as low as $74,570, hitting its lowest level since April. The world’s largest cryptocurrency is down roughly 10% this year and has fallen sharply from a record high above $126,000 in October. Bitcoin traded at around $78,050 as of Monday afternoon, struggling to gain traction despite being once pitched as a form of “digital gold.”
Asian markets also kicked off February on a negative note. South Korea’s benchmark Kospi index sank 5.26% on Monday, marking its worst day since April amid concerns about artificial intelligence spending by technology companies.
Speculative Excess and FOMO Drive Market Swings
Market analysts suggest that speculative behavior and fear of missing out have fueled the extreme volatility in precious metals. “More recently, some serious froth and leverage entered this asset class…as its continued rally got the attention of individual investors and momentum-based investors alike,” Matt Maley, chief market strategist at Miller Tabak + Co, said in a note.
Jim Reid, global head of macro research at Deutsche Bank, echoed these concerns. “The recent run up in precious metals feels to have an enormous speculative element,” he said in a note.
Ole Hansen, head of commodity strategy at Saxo Bank, noted that the rally in precious metals, particularly silver, had been “increasingly driven by FOMO and speculative excess.” Hansen said the rally was supported by strong demand from Chinese investors but warned that widespread public interest often signals exhaustion.
“When gold and silver turn into hot topics at dinner tables and in workplaces, it is often a sign that a particular phase of the rally is nearing exhaustion,” Hansen said. “While a correction had been increasingly anticipated — and was arguably overdue — the speed and depth of the sell-off proved a stark wake-up call,” he added.
Meme Stock Mentality Spreads to Commodities
Some market observers draw parallels between recent precious metals trading and the meme stock mania that gripped Wall Street in recent years. Steve Sosnick, chief strategist at Interactive Brokers, described the phenomenon as trader behavior going global. “What we’ve seen now is a greater propensity to chase rallies,” Sosnick said.
“It’s not the same trade, but it’s the same trader mentality,” he added. Kyla Rodda, senior financial market analyst at Capital.com, noted that the collapse in precious metals prices demonstrates that any market can become gripped by mania, especially in the age of financialization and gamification.
Julian Emanuel, senior managing director at Evercore ISI, categorized recent moves in gold, silver, copper and South Korean tech stocks as “exuberant” or “parabolic.” However, Emanuel said his outlook for stocks remains positive, and he expects the S&P 500 to rise roughly 13% this year.
Dollar Strength and Policy Uncertainty
Additionally, President Donald Trump’s announcement that he tapped Kevin Warsh as his Fed chair nominee contributed to a shift in market sentiment. The US dollar index rose 0.63% on Monday after climbing 0.74% on Friday, its best day since June. The rebound in the dollar can put pressure on gold, which tends to benefit in a weaker dollar environment.
Despite the steep drop on Friday, gold is up roughly 8% this year and silver has gained 13%. Gold futures were down 1.4% Monday, while silver futures fluctuated between gains and losses, up 1.7% as of the afternoon. US stocks closed higher Monday to kick off February trading, with the Dow gaining 515 points, or 1.05%.
Mohit Kumar, chief economist and strategist for Europe at Jefferies, who has been long on gold since 2022, characterized the sharp drop as an “unwind of crowded positions” rather than any systemic risks. Deutsche Bank is maintaining its forecast for gold to reach $6,000 per troy ounce by year-end. “Significant institutional investors have signalled the probability of a gradual multi-year diversification away from dollar-denominated assets, and we are not aware that this has changed,” Michael Hsueh, research analyst at Deutsche Bank, said in a note.
Wall Street this week will receive corporate earnings results including from tech giants Alphabet and Amazon that could influence market direction. Investors will also monitor Hansen’s suggestion that attention will turn to China, where local prices have traded at a premium to benchmark London markets, to gauge whether demand from Chinese investors continues supporting precious metals.
