Epic Collapse: Gold and Silver Markets Shaken by Historic Plunge

Summary

In late January 2026, the global precious metals market witnessed unprecedented volatility. Hit by a convergence of bearish factors, gold and silver prices suffered extreme losses last Friday, causing market sentiment to pivot sharply from extreme optimism to widespread caution.

• Spot Silver: Plunged 26%, marking the largest single-day drop in history within a mere 20-hour window.
• Spot Gold: Dropped 9%, its worst single-day performance in over a decade.

Market analysts attribute this massive sell-off to leaked reports of Donald Trump’s plan to nominate Kevin Warsh as the next Chair of the Federal Reserve. Anticipating a more "hawkish" policy stance, the U.S. Dollar Index surged, exerting heavy downward pressure on dollar-denominated precious metals. The recent rally was largely fueled by speculative capital from China—specifically from private equity and retail investors—rather than traditional industrial demand or safe-haven hedging. As the upward momentum stalled, a wave of profit-taking triggered a chain reaction of liquidations.

Commentary

This crash signals a significant "squeezing" of the speculative bubble. In the short term, the market is expected to enter a phase of high volatility. Investors are now watching whether physical holiday demand (driven by the Lunar New Year) can effectively offset the exodus of speculative funds. If successful, gold prices may find a support level; otherwise, the market could face a prolonged technical correction.