Gold and silver prices witnessed a sharp reversal, plunging from record highs as a global selloff hit precious metals amid a stronger US dollar, profit booking, and turmoil in equity markets.
US spot gold prices have fallen over 8% from their all-time high of $5,595.46 per ounce, slipping to around $5,112. At the time of reporting on January 30, gold was trading about 3.3% lower at $5,210. Silver saw an even steeper correction, cracking more than 11% from record levels to $108.03 an ounce, before partially recovering to around $111.
The sharp fall marks gold’s worst single-day decline since October 2021, according to Bloomberg. Analysts attribute the correction to heavy profit-taking after an extraordinary rally, a rebound in the US dollar, and liquidation across asset classes following a tech-led selloff in global equity markets.
Gold prices had surged nearly 25% in January alone, while silver jumped over 60%, driven by geopolitical tensions, tariff war fears, and concerns over central bank independence. However, analysts now say the rally had become stretched and vulnerable to correction.
“The frothiness in the market and dominance of flows over fundamentals meant it wouldn’t take much to trigger a correction,” Julius Baer’s Carsten Menke said.
Additional pressure came from speculation that Kevin Warsh could replace Jerome Powell as US Federal Reserve Chair, raising uncertainty around monetary policy and balance-sheet tightening. Meanwhile, a sharp decline in US tech stocks with Microsoft plunging 12% and the Nasdaq 100 falling 1.2% triggered broader asset liquidation, including precious metals.
Market experts caution investors against chasing the rally at this stage. WhiteOak Capital Mutual Fund noted that silver’s parabolic outperformance often signals the final speculative phase of a bull run, which historically ends poorly for late entrants.