Precious Metal Market Outlook & Bullion Trading Economic Trends

Exclusive Precious Metals Market Outlook and Recommendations

Index updated February 2, 2026

Blanchard's Bi-weekly Index

The Blanchard Bi-weekly Index is a roll-up of industry news and economic trends affecting the precious metals market and trading world.

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Market Movers

Precious Metals

Gold tumbled 9% on January 30, its largest one-day decline since April 2013. All precious metals saw a sharp pullback following news that President Trump nominated Kevin Warsh to become the next Federal Reserve Chair.

Warsh is generally viewed as the strongest inflation fighter among the final candidates. Recently Warsh has advocated for lower rates, but his track record helped fuel a rebound in the U.S. dollar, and the profit-taking in precious metals.

Meanwhile, bitcoin fell below $80,000 for the first time since April 2025.

Both gold and silver had advanced sharply since the start of the year and precious metals were extremely overbought. These overbought rallies can unwind quickly, which we witnessed in late January.

The sharp reversal has not harmed the long-term uptrend in precious metals and should be viewed as short-term profit-taking. Once the dust settles and volatility decreases, the pullbacks offer precious metals investors excellent long-term buying opportunities.

Key Takeaway:

If Warsh is confirmed, many on Wall Street believe he will advocate to push the federal funds rate to a “neutral” level, which most Fed members define around 3.00%. This could open the door to two quarter-point rate cuts in the second half of 2026, which is positive for gold.

Economic Update

A partial U.S. government shutdown began on January 30, ending fairly quickly on February 3.
U.S. factory activity grew for the first time in a year in January. The Institute for Supply Management (ISM) manufacturing PMI climbed to 52.6, its highest level since August 2022. It was the first time in 12 months that the PMI was above 50 indicating growth in manufacturing, which accounts for 10.1% of the economy.
The U.S. trade deficit grew in November. U.S imports rose to $348.9 billion, while exports decreased to $292.1 billion. That left a trade deficit of $56.8 billion, up from $29.2 billion in October, according to Commerce Department data last week.

Key Takeaway:

The U.S. federal government shutdown delays the release of the February 6 employment report.

In the News

J.P. Morgan expects gold prices to reach $6,300/oz by end of 2026 – Reuters, Feb. 2

“The brokerage now forecasts central bank purchases at 800 tons in 2026, citing an ongoing, unexhausted trend of reserve diversification.
“Even with the recent near-term volatility, we remain firmly bullishly convicted in gold over the medium term.”

Gold Slump Eases as Traders Weigh Unwinding of “Crowded” Bets – Bloomberg, Feb. 2.

“Many investors had also piled into leveraged bets, further reinforcing the cascade of selling.”
“Early signs of stabilization in gold prices had already emerged on Monday morning, supported by stronger retail demand from retail buyers for physical bars and coins.”

The World Economy is Hooked on Government Debt – Wall Street Journal, Jan 25.

“Global public debt is projected to exceed 100% of global GDP by 2029, it’s highest level since 1948, according to a recent IMF report.”
“It’s a red flag. It’s another symptom of the vulnerabilities bubbling under the surface of advanced economies,” said Neal Shearling, chief economist at Capital Economics in London.