Analysts: The gold sell-off may trigger a chain reaction, with some investors even selling other assets to cover losses.

According to ME News, on February 6th (UTC+8), analyst Jeremy Boulton stated that the sudden drop in gold prices and its rapid spread to other metals could trigger a chain reaction, prompting investors to take profits or even sell other fundamentally sound assets to offset losing positions. Currently, the market has a large amount of unrealized profits to be taken. Apart from AI-related stocks, the stock market as a whole remains strong; in the currency market, investors who invested in high-risk, high-return currencies during the past year's carry trade boom have also profited handsomely. Although such bets are high-risk, their returns are extremely lucrative, as is the case with investments in stocks and the euro. When gold prices fall, the euro/dollar exchange rate also declines, prompting traders to take profits. Although the euro/dollar long positions are not as crowded as gold, they have shown signs of being overbought during the break above 1.20. As risk aversion intensifies, previously sold-off dollars are being bought back, providing traders with a reason to take profits. (Source: ME)