Precious metals markets suffered a brutal correction Tuesday, erasing $1.28 trillion in combined market value as gold and silver prices plunged for a second straight session. Gold fell 0.20% while silver dropped nearly 40% from its January peak of $121.646 per ounce, now trading at $74.11.

Commodity ETFs tracking these metals declined as much as 4%, reflecting profit-taking after gold surged past $5,000 per ounce earlier in 2026. Analysts attribute the selloff to multiple factors including Lunar New Year liquidity constraints across Asian markets, where trading activity slows dramatically. Mainland China, Hong Kong, Singapore, and other financial centers experience reduced participation during this period.

The downturn also reflects broader macroeconomic pressures, particularly a strengthening US dollar driven by Federal Reserve signals and geopolitical developments including US-Iran negotiations. A firmer dollar typically weighs on bullion by making gold and silver more expensive in other currencies. Market strategists describe precious metals as entering a "volatile consolidation phase" after their extended rally, with technical support levels identified near $4,770 for gold and $65 for silver.