Singapore
YwinCap sees the current gold market (early February 2026) as a classic mix of structural bull trend + extreme short-term volatility. In the last two weeks, gold surged into record territory, briefly pushing above major psychological levels and printing fresh all-time highs, before a sharp, fast correction hit the market—followed by an equally violent rebound.
What just happened in the market
Gold’s rally accelerated in late January as investors rushed into safe-haven assets amid persistent geopolitical and economic uncertainty. Reuters reported spot gold breaking above $5,100/oz on January 26 and pushing higher into record territory in the following sessions.
Then, the market flipped into “forced de-risking mode.” The selloff was amplified by two practical catalysts that matter a lot in leveraged futures markets: margin changes from CME Group and a sudden shift in policy expectations after the nomination of Kevin Warsh as the next Federal Reserve chair (markets interpreted this as a potential headwind to near-term rate cuts).
By February 3, we saw the “snapback”: Reuters described gold rebounding more than 5% in a single day (its biggest daily gain since 2008) after the sharp two-day selloff, with spot around $4,906/oz, still below the reported record high near $5,595/oz.
The core question: trend reversal or violent pullback?
YwinCap’s view: this price action looks more like a violent correction inside a bullish regime than a clean long-term trend break—mainly because the underlying demand story hasn’t disappeared, and the “why” behind the rally is still present.
There are two layers here:
1) Structural support (longer-term tailwinds)
Investment demand and broad “risk hedging” flows have been unusually strong. The World Gold Council reported total gold demand (including OTC) exceeded 5,000 tonnes in 2025 for the first time, with strong ETF-related investment activity contributing to the demand picture.
Central bank buying remains elevated (even if it varies country to country), which tends to put a durable floor under long-run demand expectations.
2) Short-term destabilizers (what creates the whipsaws)
Leverage + margins + positioning: when margin requirements rise, leveraged participants often reduce exposure quickly, which can turn an orderly pullback into a cascade.
Policy narrative shocks: the market can reprice gold fast when it thinks real yields may stay higher for longer (or when USD strength returns briefly). The Warsh headline was a good example of how a narrative catalyst can be enough to trigger positioning stress.
What major institutions are signaling
YwinCap also notes that the “big money” forecast band is now explicitly bullish, but with an acceptance that the path will be rough. Reuters reported UBS raising projections (including a scenario around $6,200 levels during parts of 2026, with a later-year view still very elevated).
This matters because it suggests institutions are not treating the selloff as “game over,” but as a volatility event within an ongoing macro trade.
How to read the market from here
YwinCap would frame the next phase in three practical buckets:
A) Volatility is now a feature, not a bug
When gold makes “historic” moves up, it often invites crowded positioning. That increases the probability of abrupt multi-day reversals (up or down). The February 3 rebound after the selloff is exactly that kind of regime.
B) Watch the drivers that actually move the marginal buyer
- Rate-cut expectations vs. “higher for longer” talk (real yields matter)
- USD trend bursts (risk-off doesn’t always mean a weaker USD in the short run)
- Geopolitical risk pulse (gold reacts to intensity and headlines, not just baseline tension)
- Futures market mechanics (margins/positioning can overpower fundamentals for days)
C) Likely scenarios
- Bull trend continues, but choppy: new highs are possible if safe-haven demand persists and the market returns to pricing easier policy later in the year—but expect more “air pockets.”
- Range + violent mean reversion: if policy uncertainty stays high, gold can spend time oscillating in wide ranges while still holding an upward bias.
- Deeper drawdown: if real yields rise sharply and the dollar strengthens for a sustained period, gold can correct further even without a fundamental collapse—because positioning and macro repricing can dominate.
Practical takeaway
YwinCap’s bottom line: the trend remains supported by macro and demand factors, but the tradeability is now defined by risk control. In this environment, the difference between a smart gold view and a painful one is often position sizing, clear invalidation levels, and respect for leverage dynamics—because the market can move thousands of dollars per ounce across a few sessions in this regime.
Last modified: February 4, 2026
