Transcription
In one day, $15 trillion of wealth was wiped out as silver, gold, and other precious metals came crashing down. But what if I told you that it all started in China just days before as millions of Chinese speculators woke up to find that their entire gold investment was wiped out. And here's the frightening part. This is the biggest blow up in history. And while investors are hoping that the worst is over, stay tuned because I'm going to show you the truth behind what happened in yesterday's sell and why it could be just the beginning of a broader sell and gold and silver that hits on Monday. But not to worry, at the end I'm going to show you exactly what you need to do right now to profit on this unprecedented move in the metals.
And speaking of profit, on Christmas Eve, we alerted our CTA timer pro subscribers to buy South Korean stocks. And that ETF is still up 30.11% in just 24 days and is looking to scream higher. Now, we've rolled out some major improvements to our trading system that are driving bigger win rates, higher returns, and smaller drawdowns. But you need to lock in before the price goes up. Grab those links in the description below for your free 30-day trial. Stay tuned to the end of the show for more information.
Now, stay with me because I want you to see why the sell in metals is likely to get worse on Monday. And I've got one chart you must see if you want to profit big time on this. Now, let's dive in. Because on January 30th, gold plunged as much as 16% from as high as above 5,500 and silver created nearly 40% in intraday trading. That's the worst single day moves since the 1980s. And other metals like platinum palladium also took massive hits. And this is at a time that nobody thought the metals would come down.
Now the trigger. The media saying it was President Trump's nomination of Kevin Worse as the next Fed chair. Because markets had priced in extreme dovishness, even extreme fears of Fed independence collapsing under political pressure. And Walsh, he's known as a hawk focused on shrinking the balance sheet, he restored credibility to the Fed overnight. And as speculative money in metals came rushing out. But as you're about to see, Walsh was the excuse as this started days earlier in China is about to escalate on Monday.
Now, let's dive in deeper to why this started in China. And then I want you to see why this is going to get worse on Monday. Because everybody knows that the People's Bank of China has been buying massive amounts of gold. By the way, they don't know is who else in China has been buying because there was speculative fever over there as Ji Wu Ruy's platform is one of hundreds of small and medium-sized investment vehicles across China that use social media to entice retail investors to participate in gold's bull run for the promise of quick profits. And with precious metals prices rising by the day, returns have dwarfed that of stocks and cryptocurrencies and speculative money while it flooded in. And on top of the PBOC, Chinese and American investors have sent precious metals prices straight up. But the issue, they couldn't cash out.
Now, some of bought gold via Giw's popular online platforms were startled by the company's apparent inability to release their funds in full. And when people can't cash in, protest and panic ensues, the word gets around and more people try to sell to get their money out. And what happened? Well, the losses multiplied. Several such platforms have encountered similar issues in recent months with total potential losses running at 10 billion yuan. That's over 1.4 billion. And when gold and silver prices dropped on Friday, those losses are going to be even worse. And this is the biggest blow up in history. Hong Jian, a Shenzhen-based lawyer who specializes in investment disputes related to gold, nailed it. He said the problem is that many small investment platforms do not have proper mechanisms in place to hedge against wild price swings. an issue he said that played out many times last year.
Now, I don't know what you're thinking. Prices only go up. But here's the issue. The reason that happens in China is because prices have ballooned beyond international benchmarks and those whipsaw movements are magnified in a way that's causing these firms to go and sell it.
Now, stay with me because I want you to see what's coming on Monday. And now that you've seen what started in China weeks ago and has escalated over the past two days despite the fact that inflows into major gold ETFs in China were at the largest on Friday, but what happened on Friday is the sell off in US markets. And again, that happened while China's markets were closed. So you can see on Monday or our Sunday evening, Chinese investors are going to be rushing to cash out as they fear they're going to lose even more money if prices continue to fall. But that's not the only reason things are going to get worse on Monday because margin requirements, well, they're going up. Gold, silver, palladium, and platinum futures margins are going up for non-heightened and heightened risk profiles. And that increase means those who want to trade futures of gold, silver, platinum, palladium will need to put up more collateral to ensure that they can meet their obligations. A move that could further edge out smaller players who don't have enough cash to make the necessary deposits. And that change, what's coming Monday? The change goes into effect after markets close on Monday, giving investors a chance to either add cash or get out before they're forced out.
Now, stay locked in because the systematic machines, well, they're keyed to sell on Monday. Cuz going into Friday, the CTAs were long. According to Morgan Stanley's Quandas were estimated to be net long, five billion of silver. That's the 94th percentile versus the last five years. and long 15 billion of gold. That's the 56 percentile in the last 5 years, which means the selling is going to continue into Monday as machines continue to close out their long positions and potentially move into short positions. And what this also means, it's going to be a further unwind of leverage positions. Over the past year, investors bought over 400 million shares of leverage position and pros double xle leveraged silver ETF that generated returns over the past 12 months of over 350%. And on Friday, a total of 38 million shares were traded as buyers stepped in. But if silver prices continue to fall, more leverage traders are going to get wiped out, sending the price of silver crashing even more.
Now, stay locked in because I need you to see this one chart. If you're long precious metals right now, maybe you're looking to buy the dip or perhaps you're looking to go short if prices continue to go down. You don't want to miss because a bigger unwind it's coming. Christopher Wong, he's a strategist that oversee Chinese banking believes that reports of Walsh's nominations were a trigger, stating, quote, "It's like one of those excuses the markets were waiting for to unwind those parabolic moves, which validates the cautionary tale of fast up, fast down." And that's a key point because parabolic moves, they're an escalator up and then an elevator shaft down. Let's take a look at the cycle of a bubble because this is the key chart I want you to see. Bubbles always end the same way. Now, Friday's move down is a denial into bull trap phase which will be validated when buyers step in, which they did late on Friday. Now, if that move is indeed the bottom, prices are likely to rally up as people believe it's a great opportunity to buy the dip and that's when the real crash is going to hit. So, if you're looking to be longer, rent, don't buy. And if you're looking to go short, hang tight. Your time might be coming because these extreme moves, they're not over yet.
In fact, Goldman Sachs notes that a record wave of purchases of call options, and these are contracts which give holders the right to buy at a predetermined price, had also quote mechanically reinforcing upward price momentum. As sellers of these options, that would be dealers, hedge their exposure to rising prices by buying more silver and gold. And this what this means is that dealers who were selling the calls had to hedge by buying the underlying asset. So as these options expire and remember we have a record amount of them, dealers are going to be forced to sell the underlying asset. And that's where that phase of return to normal turns into the fear phase.
So now you've seen that while the news is suggesting that the unwind in gold and silver was due to President Trump's nomination of War as Fed chief, that this really started in the gold markets in China days before and it spilled into US markets as Chinese speculators tried to cash out but found out they couldn't. And what this did was led to a massive unwind and leverage silver down 40% before buyers stepped in hoping to cash in on the rally back up. But the selling, it may not be over yet as tiny speculators have yet to have a chance to react to this. The systematic machines, well, they probably have a lot to sell here. And when this relief rally comes, it may not last long due to the extreme amount of call options that have been bought on gold and silver because when they expire, the dealers are going to be dumping the underlying asset, and that's going to send prices crashing.
Now, if you want to profit on the precious metal bubble bursting, it's not too late to act. But you can see the clock is ticking down. Now, if you are long gold or silver, other precious metals, you want to look to get out on this ensuing rally and then hold tight. Now, for the pros here, only with those with the risk tolerance, experience in the stomach, you may want to look to be tactically short gold and silver at some point, but wait until that relief rally is up.
Now, Jeffrey Gunlock, he's a banking. He's given us some unprecedented advice. He's been saying, "Look, hold 20% of your portfolio in cash because if you want to be long, gold or silver, and these things do follow the classic bubble cycle, you're going to have an excellent opportunity to buy at lows that you didn't think we're going to ever see again." Instead of cash, you could consider short-term treasuries here, and that would be about the only call I'm considering otherwise right now. Long bond, well, it's still holding tight, but wait and let the dealers do all the buying and then come in and trade it. But again, this is not much to do with gold. It's about protecting your money to buy the dips. So, this is your road map to profiting on the potential bubble of gold and silver bursting that you can see is coming very soon.
Now, speaking of turning risk into win, remember that EWY train I mentioned at the top? It's up 30.11% in just 24 days and still looking to move higher. Let's look at how we do this and how you too can swing trade your way to big profits in 2026. Because one of the key things about this trade is it had an expected win rate of 87%. Now, how do we do it? Well, each and every day we look at the machine positioning across the broad equity, bond, currency, and commodity markets. And what we're looking to do is position our subscribers ahead of a big wave of machine buying. In this case, when you look at silver, to get out before they sell.
Now, these machines, they trade based on threshold levels. But what we've done is we've gone through, we fully optimized them and back tested them. So we know exactly which threshold levels have the biggest win rate and the highest potential for return. And that's the benefit of a fully optimized strategy because you get a higher total return, a better win rate, and a smaller draw down compared to other strategies. Now, my is so easy to use. All you're going to do every day is log in, scroll all the way down to the bottom to access the latest reports. And in there, you're going to get an update on our existing trades. You're going to get all the recommended trades from the next day, including full risk control levels, and all the optimized trades recommended on both the long and the short side. So, you get all the tradeable signals. You get my opinion on the best trades. You get full risk control levels, a tracking of all open trades and returns, a weekly update, and here's the best part. You get a free 30-day trial. So, whether you're brand new to trading or you're a seasoned trader, we're so convinced that our system is better. I want your first 30 days to be on me. All you need to do, grab those links in the description below. Use a coupon code for your free 30-day trial. And with that, I'm Steve Van Meter. Thanks for watching. Thanks for being fans. Bye now.