Gold Crashes 15%, Then Rebounds: What Now?

If you bought gold in late January at $5,200 per ounce, the first week of February was brutal. Gold plunged 15% to $4,700 in just three trading days—wiping out weeks of gains. Then, just as quickly, it bounced back above $5,000. What on earth happened, and what should Singapore investors do now?

The Crash Timeline: 10 Days That Shook Gold Markets

Here's exactly how the crash and recovery unfolded, with the key catalysts at each stage:

Three Triggers Behind the 15% Crash

This wasn't a random selloff. Three specific forces combined to create the sharpest gold decline since March 2020:

1. The India-US Trade Deal Eased Geopolitical Risk

The India-US trade deal cut US tariffs on Indian goods from 26% to 18%, while India agreed to end Russian oil purchases. Markets interpreted this as a significant de-escalation—reducing the "fear premium" that had pushed gold above $5,200.

The deal signalled that the Trump administration was willing to negotiate, not just escalate. For a market priced for perpetual trade war, this was bearish.

2. CME Margin Hikes Forced Liquidations

As gold started falling, the Chicago Mercantile Exchange (CME) raised margin requirements on gold futures by 20%. This is standard practice during volatility—but it forced leveraged traders to either deposit more cash or close positions. Many chose to sell, creating a cascade effect.

According to Reuters, the margin hikes "compounded the selloff" as algorithmic trading systems triggered stop-loss orders across the precious metals complex.

3. Profit-Taking After a Parabolic Rally

Gold had risen nearly 100% in 12 months—from ~$2,700 in early 2025 to $5,200 in January 2026. That kind of parabolic move inevitably attracts profit-taking. Many institutional investors had been waiting for any excuse to lock in gains, and the trade deal provided it.

Why the Recovery Was Equally Swift

The bounce from $4,700 back above $5,000 within a week tells an important story: the structural drivers behind gold's bull market remain intact.

• Central banks kept buying: No major central bank announced selling during the dip. China, India, and Turkey continued accumulation programmes.
• Fed rate cuts still coming: Markets still price in multiple rate cuts for 2026, keeping real yields negative—supportive for gold.
• Other trade risks unchanged: South Korea tariffs remain at 25%. Greenland tensions are unresolved. Iran negotiations stalled.
• Bargain hunters stepped in: Physical gold demand surged in Asia during the dip, with Singapore and Hong Kong dealers reporting record sales.

JPMorgan Raises Target to $6,300—After the Crash

Perhaps the most revealing signal came from JPMorgan, which raised its year-end gold target to $6,300 per ounce on February 7—just days after the crash. According to Business Insider, JPMorgan analysts noted:

"The correction was technically healthy and cleared speculative excess. The structural case for gold—central bank buying, fiscal deficits, and de-dollarisation—has only strengthened."

Other banks echoed similar views. Deutsche Bank maintained its $6,000+ target. Goldman Sachs kept $5,800 as its base case. The professional consensus: buy the dip.

What This Means for Singapore Investors

If you're tracking UOB gold prices, here's what the crash and recovery mean practically:

SGD Gold Prices Cushioned the Fall

Gold is priced in USD, but Singaporeans buy in SGD. During the crash, the USD weakened against SGD, which partially offset the price drop. While gold in USD fell 15%, SGD-denominated gold fell roughly 11-12%—still painful, but less dramatic.

UOB Spreads Widened Temporarily

During peak volatility (Feb 1-3), UOB's buy-sell spread widened from the typical 2-3% to approximately 4-5%. This is normal during extreme moves—banks increase margins to protect against rapid price changes. Spreads have since normalised.

Physical Demand Surged on the Dip

Anecdotally, UOB branches and bullion dealers in Singapore saw increased foot traffic during February 3-5 as investors bought the dip. If you're considering buying, queues may be shorter now that the initial rush has subsided.

Lessons from the Crash

Whether you panicked, bought the dip, or did nothing—here are the key takeaways:

If You Panic Sold

Selling at $4,700-4,800 and watching gold recover to $5,000+ is painful. The lesson: avoid emotional decisions. Gold's volatility is the price of admission for long-term returns. If a 15% drop causes panic, your allocation may be too large for your risk tolerance.

If You Bought the Dip

Well done—but don't mistake good timing for skill. Dip-buying works until it doesn't. A better approach is systematic dollar-cost averaging that removes the need to time anything.

If You Did Nothing

This is often the best response. If your gold allocation matches your target portfolio allocation (5-15%), sitting through volatility is exactly right.

What's Next: $6,000 or Another Dip?

The honest answer: both are possible. Key factors to watch:

• More trade deals: If the US reaches deals with South Korea or the EU, expect short-term selling pressure
• Trade escalation: New tariffs (especially on China) would likely push gold higher
• Fed rate decisions: Confirmed rate cuts = bullish for gold; delays = short-term headwind
• Silver's behaviour: Silver's recovery from $77 signals continued precious metals appetite

For a detailed breakdown of expert forecasts, see our Gold Price Forecast: $6,300 by Year-End? analysis.

Frequently Asked Questions

Why did gold crash 15% in February 2026?

Three simultaneous triggers: the India-US trade deal reduced geopolitical risk, CME margin hikes forced leveraged traders to liquidate, and profit-taking kicked in after gold's parabolic rally from $2,700 to $5,200 in 12 months.

Is the gold bull market over?

No—major banks including JPMorgan ($6,300 target) and Deutsche Bank ($6,000+) raised forecasts after the crash. The structural drivers—central bank buying, Fed rate cuts, and USD weakness—remain firmly intact.

Should I buy gold after the crash?

If you're below your target portfolio allocation, the dip offers relatively better entry prices. Use dollar-cost averaging rather than trying to time the exact bottom.

How did Singapore gold prices react during the crash?

SGD gold prices fell approximately 11-12% (less than the 15% USD drop) due to concurrent USD/SGD weakening. UOB spreads widened temporarily to 4-5% but have since normalised. Track live prices on our homepage.

What caused gold to rebound so quickly?

Strong physical buying in Asia, unchanged Fed rate cut expectations, continued central bank accumulation, and JPMorgan's upgraded $6,300 target all contributed to the swift recovery above $5,000.

Conclusion

The February 2026 gold crash was dramatic but not unprecedented—violent corrections are normal within bull markets. What matters is that the fundamental case for gold hasn't changed: central banks are buying, real rates are negative, trade tensions persist, and the dollar remains under pressure.

For Singapore investors, the crash offered a real-time stress test. Those who panicked learned an expensive lesson; those who stayed disciplined—or bought the dip—are already recovering. Going forward, maintain your target allocation, use dollar-cost averaging, and remember that gold's long-term trajectory is determined by fundamentals, not any single week's headlines.

Track live UOB gold prices and explore our buying guide for record-price gold for a practical decision framework.