Why Gold Prices Are Dropping During the Lunar New Year?

Liquidity dries up as the Year of the Horse begins, leaving bullion exposed to a sharp correction while analysts double down on $5,000 targets.

Editorial Team (ET)February 19, 2026

Silence might be golden, but right now, the silence coming from Asian markets is proving quite heavy for precious metals. Gold prices stumbled below the psychological $4,900 mark on Tuesday, a descent driven less by fundamental weakness and more by the distinct lack of buyers in the world’s largest consuming region. With China and much of Asia shuttered for the Lunar New Year festivities, liquidity evaporated, leaving the bullion market prone to the kind of volatility usually reserved for penny stocks.

Spot gold fell as much as 3% intraday, hitting its lowest level in over a week. This wasn't an isolated incident but rather a continuation of the erratic behavior seen since late January. After a blistering rally that saw the metal peak above $5,595 an ounce, gravity took hold with a vengeance, snapping prices back to near $4,400 in just two days. While the metal has since clawed back some dignity, the current trading environment remains as jittery as a caffeinated day trader.

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