Gold Reclaims $5,000 – As China Quietly Dumps U.S Treasuries for Bullion

In a matter of days, the metal has delivered some of the largest one-day gains on record.

Gold has surged back above the psychologically powerful $5,000 an ounce level despite a 21% drawdown that briefly dragged prices to $4,400. That pullback proved short-lived. Buyers stepped in aggressively, triggering an astonishing rebound of more than 17% in less than 48 hours. It followed similarly extraordinary sessions earlier in the month, with Gold leaping 11% and 9% in single trading days.

To the untrained eye, the price action looks chaotic. To seasoned professionals, it looks familiar.

At The Gold & Silver Club, such conditions are viewed not as anomalies, but as opportunity.

This Is Where Fortunes Are Made

“2026 has become the year of buy low, sell high – rinse and repeat,” says Lars Hansen, Head of Research at The Gold & Silver Club. “This is where fortunes are made. The asymmetry of risk-reward in Gold right now is staggering. A single, well-timed trade can generate what it used to take months – sometimes years – to achieve, in a single day.”

Across Wall Street, similar language is quietly circulating. A growing number of major banks have begun referring to the current environment as a ‘Golden Age of Trading’ – defined by extreme volatility, compressed cycles and outsized opportunity for those positioned correctly.

A Correction That Arrived Right On Schedule

The recent pullback arrived at a moment when stretched technicals, heavy speculative positioning and unfavourable seasonality converged. Leverage was flushed. Weak hands were forced out. And yet, despite the severity of the correction, Gold has already clawed back a substantial portion of its losses.

A weakening U.S dollar, stabilizing financial conditions and renewed safe-haven demand have provided immediate tailwinds.

“While near-term volatility is likely to persist,” Hansen notes, “this move is best understood as a positioning-driven reset – not a fundamental turning point.”

Zoom out, and the macro backdrop remains stubbornly supportive.

China Is Making Its Move – Quietly

One development stands out.

Chinese regulators have reportedly advised domestic banks to rein in their holdings of U.S Treasuries, citing concentration risk and heightened volatility. Institutions with large exposure have been encouraged to pare positions, while new purchases have been quietly discouraged.

Chinese banks held roughly $298 billion in dollar-denominated bonds as of September. The concern is straightforward: heavy Treasury exposure leaves balance sheets vulnerable at a time when the “risk-free” status of U.S debt is being openly questioned.

European money managers are voicing similar concerns, while the U.S dollar has slid to its weakest level since early 2022 amid easing rate expectations and mounting fiscal anxiety.

All of this points in one direction. Less U.S Treasuries. More Gold.

This catalyst alone could send Gold prices in one direction from here.

And that’s higher, a lot higher!

China’s 15-Month Buying Spree

Fresh data confirms that the People’s Bank of China has extended its Gold purchases for a fifteenth consecutive month, reinforcing official demand that underpinned the bull market prior to the recent sell-off.

Gold holdings rose to 74.19 million ounces by the end of January, up from 74.15 million a month earlier. The value of China’s Gold reserves surged to $369.6 billion, reflecting both continued accumulation and higher prices.

“This is an accumulation window,” Hansen says. “Supply is transferring from leveraged speculators to long-term capital. When liquidity shifts, weak hands sell. Strong hands accumulate.”

The Path to New All-Time Highs Reopens

Over the past 15 years, The Gold & Silver Club has built a reputation as the most accurate forecaster of Precious metal prices, a record well documented across leading financial publications and institutional research reports. The firm’s proprietary models have consistently pinpointed major turning points in both Gold and Silver – earning GSC recognition as a trusted authority among institutional investors and private wealth clients alike.

The Gold & Silver Club’s proprietary models now project a base-case target of $6,100 an ounce within the next 12 months – a level Hansen describes as conservative.

Wall Street forecasts are converging rapidly. UBS, JPMorgan and Wells Fargo now expect Gold to reach $6,200 – $6,300 by the end of 2026. From current levels around $5,033, this target implies a 25% upside over the next ten months.

For investors and traders alike, the message is becoming harder to ignore.

“Gold has rarely looked this asymmetric,” Hansen concludes. “Yes, volatility is elevated. But in the midst of chaos lies opportunity. Dips like this aren’t a warning – they’re an invitation. The real question is how much longer this window stays open before the next historic breakout begins.”