Last night, gold and silver experienced a historic plunge in the middle of the night. Silver fell from 103 to 75 in two hours, which is equivalent to a 38% pullback from 121 in 24 hours. I checked the historical data and the largest single-day pullback in the past has never exceeded 20%, so this is another case of something you never see before.
As for gold, it fell from a low of 5500 to 4700, before rebounding to close at 4860.
Last night, when the price plummeted, I was already worried about something serious. The latest margin requirement for silver set by futures companies is 19%, and that's been increased. The daily price limit is ±17%, which is clearly insufficient to cover the drop in international silver prices last night. If a client's account is liquidated, the futures company will have to cover the remaining losses. That's a huge sum of money.
Fortunately, it rebounded somewhat in the last two hours, eventually closing at $85, down 26%. This is much better; it's more like the accounts of those who went long were wiped out. Don't worry about them; anyone who dares to hold long positions over the weekend at this point is a tough nut to crack, they can afford to lose… right?
Those doing silver LOF arbitrage shouldn't panic. Currently, the premium exceeds 100%. As long as you can sell within six limit-down days, you'll make a profit. Even if you can't sell, you can use the redemption channel, and the loss will only be a few dozen yuan, not a big problem. As for those speculating in the secondary market, they'll have to suffer some losses, starting with two to three limit-down days, at worst a 50% drop. This is much better than those whose futures accounts have exploded.
There's also the precious metals sector in the A-share market. The 85% increase in January was indeed too much. Unless there's a violent rebound next Monday, it's likely to hit the daily limit down, and one limit down might not be enough.
Gold and silver, as world-class commodities, should certainly not have this level of volatility. It can only be said that we are currently in an extreme historical situation, where human greed and fear have been amplified to an extreme. 5500 is reasonable today, 4500 is reasonable tomorrow, and 5000 is reasonable the day after tomorrow. Any price is reasonable because human emotions are inherently volatile.
What will happen when the emotions cool down? How much will gold be worth then? I can give you a reference: the monthly MA20, which is usually a bottoming indicator for medium- to long-term trends. It's currently at 3228, and it's rising at a rate of 120-130 points per month. Tomorrow is February, so it will soon be around 3350, and it will continue to rise every month thereafter.
What I'm referring to is a safety net indicator, typically used to provide support during significant pullbacks. It's not guaranteed to reach that level; the probability is low. However, when investing, you should have a risk management strategy based on a pessimistic outlook. In simpler terms, if it really does drop to 3300-3500, you shouldn't be unable to afford the loss.
Another thing happened last night: Trump officially nominated Kevin Warsh as the next Federal Reserve Chairman. In my article on January 10, I mentioned betting on the Fed Chairman candidate through blockchain casinos. At that time, Kevin Warsh was leading with a 43% probability. Gamblers really know everything when it comes to making money.
This guy was born in 1970 into a middle-class family in New York. His father ran several companies, and his mother was a journalist. Kevin Walsh received an elite education from a young age, earning his undergraduate degree from Stanford and his doctorate from Harvard. He is a typical winner in life.
However, his real breakthrough came in 2002 when he married Jane Lauder. The name itself suggests something extraordinary; his wife is the granddaughter of Estée Lauder, a true member of the old-money elite. His father-in-law is a 60-year friend of Trump's, and it's said that this old man was the one who suggested the purchase of Greenland to Trump.
Kevin Warsh himself is no ordinary man. He worked at Morgan Stanley in his youth and was nominated by President Bush to be a Federal Reserve governor at the age of 35. In 2018, Trump considered him as Fed chairman, but after an interview, he ultimately chose Powell. However, after eight years of back and forth, Trump demanded Powell's removal and nominated his friend's son-in-law to succeed him.
Kevin Warsh was previously known in the financial world as a hawk who supported prudent monetary policy, but recently his tone has changed, and he has proposed moderate interest rate cuts. Many people think that he is deliberately pandering to Trump in order to run for the position of Federal Reserve Chairman.
After all, he's already 56 years old. If he doesn't seize this opportunity, he'll never be able to stand on such a big stage as the Federal Reserve in his entire life. If I were him, I would have compromised too. Screw faith, I'll say whatever the president likes, and I'll just get the job first.
Let me share another hot topic in the AI world recently. Someone in the US has created an AI robot called Clawdbot . It's no longer just a webpage to chat with you, but a "digital human" that can take over your computer, has memory, and proactively works for you 24/7 .
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It can completely take over your computer and have all permissions.
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You can instruct it through messaging apps like Telegram, WhatsApp, or Slack. Just send it a message like, "Rename the files in my downloads directory by date," and it will do it automatically.
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It has long-term memory and maintains its own local file to store data. If you said a month ago that you liked a certain female celebrity, it can remember that.
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It is proactive; for example, if it observes a sharp drop in silver prices, receives an urgent email, or the weather turns bad, it will proactively talk to you and offer advice.
This AI program is not yet mature, and the code shows more than 500 security vulnerabilities. It is not recommended to deploy it on your own computer. Therefore, many foreigners buy Mac minis specifically to run it, which has led to Mac minis selling out.
Why is the code immature? Because this AI robot was written by a person named Peter Steinberger, and note that it was written by him alone.
This guy used to create a PDF development library, which he sold a few years ago for 100 million euros, retired early, and now spends his days surfing, skiing, walking his dog, and traveling the world. Last year, feeling a bit bored, he tried writing programs for AI. In his own words, he wrote some random code over a few weeks, and then discovered that the AI seemed to come alive.
I wonder how those tech giants with hundreds of people who can't even produce a decent product feel when they see Peter's Clawdbot, created by one person. The materialist conception of history I learned as a child taught that history is created by the people, and heroes and geniuses are products of their time. But I clearly see that many historical turning points and developments are driven by just a few individuals; history is clearly an interplay of necessity and chance.
The post about last night's giveaway was gone this afternoon. It wasn't deleted, but rather set to "only visible to the author." I'm not sure of the specific reason; I can't guess who has that permission (A, B, C, D, E, F, G), and there was no system notification. Actually, I recalled last night's content and there weren't any sensitive topics. After thinking about it, I think the giveaway might have crossed a line, so we discussed ending the event early this afternoon. There's still 48,749 yuan left to distribute, which I'll use for other giveaway activities later. Anyway, the money will definitely be spent on you guys.
That's all, time to clock in.
Original Article: View Chinese Version
