Liz Ann Sonders’ February Market Snapshot1 opens not with a forecast, but with a confession of sorts. She acknowledges that the surge in investor questions around gold and silver had reached an “extremely elevated” level—enough to warrant a dedicated discussion . That, in itself, becomes part of the signal.
What follows is not a precious-metals sales pitch, nor a reflexive contrarian dismissal. Instead, Sonders dissects a familiar market phenomenon—parabolic price action colliding with leverage, policy expectations, and investor psychology—and explains why gold and silver have recently behaved less like stores of value and more like speculative macro instruments.
When the Questions Become the Clue
Sonders begins by grounding the discussion in price behavior, not narrative. Six-month charts of gold and silver show a clear pattern: a steep, accelerating ascent followed by a sharp correction. Narrowing the lens to the most recent three weeks, she notes that “the slope of the gains really kicked into higher gear,” precisely when investor inquiries spiked .
At conferences and events, the question she heard most often was whether investors should “jump on the precious metals bandwagon.” Her response was measured but telling: “I’m never a contrarian just to be a contrarian, but I will say that my antenna got up” .
Why? Because the trade had become dangerously one-sided.
“It was clear that FOMO—fear of missing out—had become a driving force,” she says, reminding investors that “FOMO is not an investment strategy… nor is panic” . The subsequent pullback, she suggests, arrived almost on cue.
The Macro Spark: Rates, the Dollar, and Real Yields
The correction was not random. According to Sonders, it was catalyzed by a repricing of interest-rate expectations and the U.S. dollar, variables to which precious metals are acutely sensitive.
“Precious metals are highly sensitive to the path of real yields,” she explains, emphasizing that gold, unlike bonds, has no yield—its return is entirely price-driven . When markets reassessed the likelihood of less Federal Reserve easing than previously hoped, real yields moved higher, and gold and silver “began a quick descent.”
Compounding this shift was a political signal: the announcement of Kevin Warsh as President Trump’s pick for Fed Chair. While Sonders notes Warsh’s views have evolved over time, “the market’s initial impression was that Warsh leans more hawkish than dovish,” prompting a rebound in the dollar and forcing traders to rethink precious-metals exposure .
Leverage, Liquidity, and the Plumbing Beneath the Trade
If macro forces lit the match, market structure poured on the accelerant.
Sonders is explicit: “Leverage and plumbing have mattered more than usual” . Silver, in particular, amplified gold’s moves due to its thinner liquidity and heavier industrial usage, making it more reactive when positioning shifted.
She describes the price action as resembling “positioning-driven air pockets,” where futures-heavy investors were caught offside. Margin calls followed. Liquidations cascaded.
“Margin calls can force liquidations and can sometimes turn orderly pullbacks into more waterfall-like declines,” she explains . The situation intensified when the CME Group raised margin requirements on gold and silver futures after the January 29 plunge, mechanically flushing out leveraged speculators and spiking volatility.
The Paradox of Strong Fundamentals
Crucially, Sonders does not argue that gold and silver lacked structural support. Quite the opposite.
“The bid underneath gold has been structurally strong and to some degree fundamentally sound,” she says, pointing to global central-bank buying, strong ETF inflows, and “exceptionally strong 2025 demand dynamics” reported by the World Gold Council .
Silver had an additional tailwind: industrial demand combined with a supply-demand imbalance. Yet this strength carries a paradox. Crowded long exposure can make pullbacks sharper—but also fuel rebounds.
“That strength… can paradoxically make pullbacks sharper because there’s more crowded long exposure to unwind,” Sonders notes, adding that the ever-present “buy-the-dip trading crowd” can just as quickly re-enter .
Volatility as the New Normal
Sonders is careful to set expectations. “We’re not precious metals experts,” she says plainly, but volatility remaining elevated is “not a stretch” given the environment .
Short-term price action, she argues, may be driven as much by speculative positioning, margin levels, ETF flows, momentum signals, and headlines as by fundamentals. Silver, she quips, is “often seen as gold on steroids.”
The implication is critical: even if the longer-term backdrop remains constructive, investors should expect frequent spikes and pullbacks—especially in silver.
From Safe Haven to Macro Asset
Sonders’ conclusion reframes how investors should think about precious metals today.
“Think risk management, not price forecasting when it comes to precious metals,” she advises . With macro data uncertain and positioning dominant, gold and silver are “arguably not trading as much like slow-moving stores of value and more on speculation.”
Gold, she concedes, “may still work as a strategic diversifier,” but in the near term it should be treated “more as a volatile macro asset, not a sleepy safe haven.” Silver, she adds, should be viewed as “its high-beta cousin” .
Her practical guidance is succinct: watch the dollar and real yields first—and headlines second.
Key Takeaways for Advisors and Investors
- Crowded trades carry hidden risk: Elevated enthusiasm and FOMO can be early warning signs of vulnerability, not confirmation.
- Gold and silver are trading tactically, not passively: In the current regime, they behave more like macro assets than defensive ballast.
- Leverage matters more than fundamentals in the short run: Futures positioning, margin requirements, and liquidity can overwhelm otherwise constructive demand.
- Silver magnifies everything: Its thinner liquidity and industrial exposure make it structurally more volatile than gold.
- Risk management beats prediction: Advisors should frame precious metals allocations around volatility control and diversification—not price targets or narratives.
Footnote:
1 "Market Snapshot | February 2026." Schwab Brokerage, 5 Feb. 2026, www.schwab.com/learn/story/market-snapshot.
