International Gold Faces "Liquidity Crisis," Flash Crash Threatening the Foundation of the Bull Market? — Three Key Points to Watch for Gold and Silver Today

1. Market Review: Last Friday, international spot gold declined for the eighth consecutive trading day, marking the longest losing streak since October 2023. The decline accelerated during the U.S. trading session, with an intraday drop exceeding $150, reaching a new low in over a month. The week ended down 3.45% at $4,491.15 per ounce, with the weekly decline the largest since 1983. International spot silver broke below the $68 level, ultimately closing down 7.04% at $67.79 per ounce.

2. Key Indicators: Over the weekend, escalation of the US-Israel-Iran conflict worsened market risk sentiment, Asian stock markets plummeted, triggering liquidity squeezes, and gold was caught in the downturn, temporarily erasing its gains for the year. The GVZ remained high at 32, indicating that high volatility is likely to persist. CFTC positioning data (as of March 17) shows that gold short positions increased more than long positions, with net positions decreasing by 3,263 contracts; silver saw long positions decrease while short positions increased, with net positions decreasing by 2,697 contracts. The data is one week lagged; the ongoing decline in gold prices may trigger long liquidation, further intensifying selling pressure. If silver longs see an opportunity and increase holdings, it could provide some support. The duration of the weakness caused by liquidity squeezes may be limited.

3. Perspective from Analysts: Neils Christensen, an analyst, stated that the Middle East crisis impacts global supply chains, and the U.S. House of Representatives proposed the Silver Act, aimed at relaxing geographic restrictions on COMEX-approved delivery vaults, to diversify the currently highly concentrated storage risks in New York, thereby enhancing market resilience and reducing systemic risk. Last week, gold experienced its largest weekly decline in six years (-8%), but the long-term fundamentals of the bull market—such as global debt expansion and economic fragility—remain unchanged. Meanwhile, the tokenized gold market is developing rapidly, with market capitalization soaring from $1.6 billion to $4.4 billion by 2025, lowering investment barriers through digitalization and potentially reshaping the industry landscape.