Gold Plunges 6%, Silver Drops 8% in Sudden Precious Metals Selloff
A dramatic selloff gripped the precious metals market during Thursday's trading session on January 29, sending gold prices crashing by nearly 6% and silver prices tumbling by 8%. Both metals retreated sharply from their all-time high levels as the US dollar strengthened significantly and the US stock market experienced a notable decline.
Worst Intraday Fall for Gold Since October 2025
According to a Bloomberg report, this represents the worst intraday fall for gold prices since October 2025. US spot gold prices slid 5.7% to $5,104.6 per ounce before trimming some of those losses. From a record high near $5,595, the metal is now down approximately 8%. At the time of writing, the spot gold price was 1.5% lower at $5,334 per ounce. Meanwhile, US gold futures for February delivery remained around 2% lower.
Simultaneously, US spot silver prices cracked over 8% to $106.8. The white metal managed to recoup some losses and was last trading 1.5% down from its previous levels.
What's Behind the Crash in Gold and Silver Prices?
Analysts attribute the sudden fall in gold and silver prices to multiple interconnected factors. These include profit-taking at higher levels, a significant jump in the US dollar's value, and a broader selloff in equity markets that extended to other asset classes.
Given the sharp rally in gold and silver since the beginning of 2025, many analysts believe the upward momentum had become stretched and vulnerable to correction. "Given the frothiness in the markets and the dominance of flows over fundamentals, it does not need much for a correction," Julius Baer Group Ltd.'s Carsten Menke was quoted as saying by Bloomberg.
The strengthening US dollar made dollar-denominated precious metals more expensive for holders of other currencies, reducing demand. Additionally, the decline in US stock markets prompted investors to liquidate profitable positions in precious metals to cover losses elsewhere, creating a cascade effect.
Market Context and Future Outlook
The precious metals market had been experiencing a sustained bull run, with both gold and silver reaching unprecedented highs. This sudden correction serves as a reminder of market volatility and the complex interplay between currency movements, equity performance, and commodity prices.
Market observers will be closely watching for further developments, including Federal Reserve policy decisions, inflation data, and geopolitical factors that could influence precious metals pricing in the coming sessions.
