Published: Friday, January 30, 2026 · 10:32 PM | Updated: Friday, January 30, 2026 · 10:32 PM
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(Bloomberg) — Gold suffered its biggest slide in four decades and silver posted a record intraday decline in a stark reversal of the rally that lifted prices to all-time highs.
Gold fell more than 12% to slump below $5,000 an ounce in its biggest intraday decline since the early 1980s. Silver plunged as much as 36%, a record intraday decline, as the selloff swept through the broader metals markets. Copper fell 3.4% in London, retreating from Thursday’s record high. The dollar jumped, boosted by a selloff commodity currencies including Australian dollar and Swedish krona.
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A wave of investor demand for precious metals over the past year has clocked record after record, shocking seasoned traders and driving exceptional price volatility. That accelerated in January, as investors piled into the time-honored havens amid concerns about currency debasement and the Federal Reserve’s independence, trade wars and geopolitical tensions.
Friday’s selloff is the biggest shock to the rally, outdoing the slump in October. It was triggered by the dollar rebounding after a report the Trump administration was preparing to nominate Kevin Warsh for Fed chair, a move later confirmed. The greenback’s rally undercut sentiment among investors who had been piling into metals after the US president signaled a willingness to let the currency weaken.
Traders regard Warsh as the toughest inflation fighter among the finalists, raising expectations of monetary policy that would underpin the dollar and weaken greenback-priced bullion.
“Trump announcing Warsh as his pick for next Fed Chair has been a US dollar positive and precious metals negative,” said Aakash Doshi, global head of gold and metals strategy at State Street Investment Management. “This has probably been exacerbated by month-end rebalancing as both short dollar and long precious metals has been the consensus macro trade over the past two to three weeks.”
Gold’s move “validates the cautionary tale of fast-up, fast-down,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. While reports of Warsh’s nomination were a trigger, a correction was overdue, he said. “It’s like one of those excuses markets are waiting for to unwind those parabolic moves.”
Precious metals had already been primed for extreme moves, as soaring prices and volatility strained traders’ risk models and balance sheets. A record wave of purchases of call options, contracts which give holders the right to buy at a pre-determined price, had also “mechanically reinforcing upward price momentum,” Goldman Sachs Group Inc. said in a note, as the sellers of the options hedged their exposure to rising prices by buying more.
Bullion’s slide may have been accelerated by a so-called gamma squeeze. That’s where dealers who are short options need to buy more futures — or shares in the case of gold exchange-traded funds — as prices rise through levels of large options holdings and sell as they fall back through, to keep their portfolios balanced. For the SPDR Gold Shares ETF, there were large positions expiring Friday at $465 and $455, while on Comex, sizable March and April options positions were at $5,300, $5,200 and $5,100.
The metals rout also drove down shares of major mining companies including top gold producers Newmont Corp., Barrick Mining Corp. and Agnico Eagle Mines Ltd., whose shares had slid more than 10% in New York trading.
Even after Friday’s pullback, gold still registered a monthly gain of 13% while silver was up 19% for the month.
With gold and silver jumping so much already this year, some technical indicators flashed warning signs. One is the relative-strength index, which in recent weeks signaled that both metals may have become overbought and due a correction. Gold’s RSI recently hit 90, the highest it has been for the precious metal in decades.
Volatility is very extreme and both psychological resistance levels of $5,000 and $100 respectively have been broken numerous times on Friday, according to Dominik Sperzel, head of trading at Heraeus Precious Metals. “We need to prepare for the roller-coaster to continue though.”
Chinese investors have led the charge, buying in such force that it prompted the Shanghai Futures Exchange to rush out measures to cool the surge in precious and industrial metal markets.
What Bloomberg Strategists Say:
“The silver/gold ratio has climbed almost as much as it did in the late 1970s, and today’s dramatic moves show that might have marked a rejection point. Gold and silver separately, however, so far never quite matched their 1979 rallies. Whether silver versus gold marks the end of an historic rally in precious metals, it’s too early to say. But price is now taking over as the primary driver, and fundamentals will take a back seat for now.”
— Simon White, macro strategist. For the full analysis, click here
Meanwhile, the risk of another US government shutdown was avoided after President Donald Trump and Senate Democrats reached a tentative deal. The White House is continuing to negotiate with Democrats on placing new limits on immigration raids that have provoked a national outcry.
Spot gold closed lower at $ an ounce in New York. Silver plunged to settle at $ an ounce, while platinum and palladium also tumbled. The Bloomberg Dollar Spot Index gained . A higher US currency makes commodities more expensive for investors holding other currencies as they’re priced in the greenback.
Copper on the London Metal Exchange settled at $13,157.50 a ton, retreating after surging above $14,000 a ton for the first time on Thursday in its biggest intraday jump since 2008.
–With assistance from David Marino.
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