Gold And Silver Prices Plunge After Record Rally

The global metals market was rocked on January 30, 2026, as gold, silver, and a host of other metals saw their prices tumble in a dramatic reversal from the record-breaking rallies that had defined the start of the year. For weeks, almost every major metal had been on a tear, with investors piling in amid geopolitical uncertainty, persistent inflation fears, and a weakening U.S. dollar. But Friday’s sharp selloff left traders and analysts scrambling for explanations—and wondering what comes next.

In India, the effects were felt immediately and acutely. According to The Economic Times, the price of 22-carat gold in Chennai dropped by Rs 600 per gram, while silver fell by Rs 10 per gram. Indian exchange-traded funds (ETFs) tracking these metals were hit hard as well: Nippon India GoldBees slumped about 8% to Rs 135 per unit, and Tata Gold ETF dropped nearly 7% to Rs 16. Silver ETFs, including Nippon India ETF SilverBees, sank by 10%, mirroring the global plunge.

The carnage wasn’t limited to precious metals. Base metals, which had also enjoyed a spectacular run-up, faced heavy selling. National Aluminium Company (NALCO), which had surged nearly 80% over the past three months, fell 9% in a single day. Hindustan Copper, up 120% in the same period, also tumbled by 9%. Hindustan Zinc, the world’s largest integrated zinc producer and among the top five global silver producers, saw a 10% drop. For investors who had ridden the rally, the sudden reversal was a harsh reminder of the volatility lurking beneath the surface.

What triggered this abrupt shift? Much of the blame, analysts say, falls on speculation swirling around the next U.S. Federal Reserve chair. As reported by Bloomberg, former Fed governor Kevin Warsh is rumored to be President Donald Trump’s favored pick. Trump has repeatedly expressed a preference for a Fed chair who would aggressively cut interest rates—from the current 3.5%–3.75% range down to as low as 1%. Warsh, who served from 2006 to 2011, is known for his accommodative stance, and the mere prospect of his nomination sent shockwaves through global markets.

The anticipation of Trump’s announcement rattled investors, driving a surge in the U.S. dollar. According to CNBC, a gauge of the dollar rose as much as 0.5% on January 30, making precious metals more expensive for buyers outside the U.S. As the dollar strengthened, gold plunged as much as 5.8%, continuing the wild swings that had interrupted its record-breaking rally the previous day. Silver and platinum fared even worse, tumbling more than 10% each.

Spot gold prices declined 6% to $5,080.14 per ounce, while spot silver prices fell 14% to $99.89, according to CNBC. FXStreet data showed silver trading at $100.67 per troy ounce, down 13.63% from $116.56 the day before. Despite these steep drops, silver prices were still up 41.63% since the beginning of the year—a testament to just how extraordinary the rally had been.

For context, the surge in gold and silver was fueled by a potent mix of factors: geopolitical, economic, and trade uncertainty; a weakening dollar; and robust industrial demand, particularly for silver. Investors had flocked to these metals as safe havens, seeking shelter from market turbulence and the specter of currency debasement. Silver’s dual identity—as both an investment asset and an indispensable component in industries like electronics and solar energy—only added to its allure.

But the speed and ferocity of Friday’s decline caught many off guard. Ed Yardeni, president of Yardeni Research, told CNBC, “The surprise is that it went from $3,000 to $5,500 without any significant correction. A correction back to $5,000 with some consolidation around that price would be a normal pattern in a bull market. So far, this has been more of a melt-up than a traditional bull market in precious metals.”

Others saw hints that the selloff was more than just profit-taking. Gregor Gregersen, founder of Silver Bullion, remarked, “If entities were trying to take profits and liquidate large gold or silver holdings, they would do so gradually to obtain the highest possible price. What we saw was a massive drop over a very short period of time, without any obvious public drivers behind such selling pressure.” He suggested that the move may have been “intended” to trigger further declines—a view echoed by some market watchers.

Adding another layer to the drama, Goldman Sachs strategists noted that recent price action in silver reflected more than just momentum chasing. In a note summarized by TipRanks, they pointed to a liquidity squeeze in London, where global silver benchmark prices are set. Thinner inventories there made the market hyper-reactive to shifts in flows, amplifying both rallies and pullbacks. Speculation around U.S. trade policy, which had previously excluded silver from tariffs, encouraged traders to move metal into the U.S., draining London vaults and tightening supply at the pricing hub. The result? “Thinner inventories have created conditions for squeezes,” the bank explained, warning that extreme price swings are likely to persist.

Meanwhile, the Gold/Silver ratio—a measure of how many ounces of silver are needed to equal one ounce of gold—jumped to 50.01 on January 30, up from 46.28 the day before, according to FXStreet. This shift signaled that silver’s drop had outpaced gold’s, a phenomenon not uncommon during periods of heightened volatility.

Despite the turbulence, many analysts remain bullish on gold and silver over the long term, though they urge caution. Manpreet Gill, regional chief investment officer for Standard Chartered, told CNBC that both metals are currently in overbought territory, with technical indicators suggesting more pullback could be on the horizon. “The near-term technical backdrop is stretched,” Gill said, noting that the gold-silver ratio had reached an extreme last seen in 2011—a historical precursor to periods of consolidation. “In such an instance, gold may experience milder consolidation, while silver, given its higher volatility, could see larger swings.”

For investors, the message is clear: volatility is here to stay, and chasing short-term gains could prove risky. “Just because prices are at record highs doesn’t mean it’s too late,” said Zavier Wong, market analyst at eToro. “The mistake isn’t missing the rally. It’s assuming there won’t be volatility along the way.”

Looking ahead, Standard Chartered’s Gill recommends a gradual, incremental approach for those underweight in gold, while those already at target allocations should maintain their positions. Exchange-traded funds offer liquidity and ease of access, while physical gold may suit long-term investors focused on wealth preservation. Heidi Sum, global head of product specialists for liquid real assets at DWS, echoed this view, noting that physically backed gold or silver ETFs provide transparency and daily liquidity.

Friday’s selloff may have been jarring, but the forces that propelled metals to their recent highs—geopolitical uncertainty, fiscal concerns, and industrial demand—remain in play. As the world waits for President Trump’s decision on the next Fed chair, investors would do well to buckle up. If the past week has shown anything, it’s that in the world of metals, even the most dazzling rallies can turn on a dime.