Global precious metals markets witnessed a sudden and sharp selloff on Thursday, January 29, as gold prices crashed nearly 6% and silver tumbled more than 8% during intraday trade. The steep fall came just days after both metals touched record highs, marking a dramatic shift in investor sentiment after months of relentless gains.
According to Bloomberg data, the plunge marked the worst intraday decline for gold since October 2025. The selloff unfolded as a stronger US dollar, profit booking at elevated levels, and a sharp downturn in global equity markets combined to pressure prices across asset classes.
US spot gold prices slid as much as 5.7% to $5,104.6 per ounce before paring some losses. From a recent all-time high near $5,595, the yellow metal is now down roughly 8%. At the time of reporting, spot gold was trading about 1.5% lower at $5,334 an ounce, while US gold futures for February delivery remained around 2% lower.
Silver saw even steeper losses. US spot silver prices plunged over 8% to $106.8 per ounce before recovering part of the decline. The white metal was last seen trading about 1.5% lower, though volatility remained high throughout the session.
Market analysts say the correction was driven largely by aggressive profit-taking after an extraordinary rally. Since the start of January alone, gold prices have surged nearly 25%, while silver has gained more than 60%. In 2025, gold rose about 65% and silver skyrocketed nearly 148%, making the rally increasingly vulnerable to a pullback.
Carsten Menke of Julius Baer Group noted that markets had become frothy, with price action driven more by capital flows than fundamentals. In such conditions, even a small trigger can lead to an outsized correction, he said.
Another key factor behind the decline was the rebound in the US dollar. The greenback reversed earlier losses and strengthened by around 0.3%, making dollar-denominated commodities more expensive for overseas buyers. Historically, a stronger dollar tends to weigh on gold and silver demand, and Thursday’s price action followed that pattern.
The selloff was further intensified by a sharp decline in US equity markets. A tech-led rout dragged down major indices, triggering liquidation across other asset classes. The Nasdaq 100 fell 1.2%, the S&P 500 slipped 1.13%, and the Dow Jones Industrial Average declined 0.42%.
Technology stocks bore the brunt of the fall, with Microsoft plunging 12%, its steepest drop since 2020, amid concerns that massive AI investments could take longer than expected to generate returns. As equities slid, investors rushed to raise cash, selling positions in precious metals, industrial commodities, and even cryptocurrencies.
Phil Streible, chief market strategist at Blue Line Futures, said the equity market decline sparked a broader liquidation across markets. According to him, the recent price action suggests that markets may have reached a point of peak optimism, prompting investors to reassess risk.
Despite ongoing geopolitical tensions, economic uncertainty, and concerns over central bank independence supporting long-term demand for gold and silver, analysts are now urging caution. Several experts believe silver’s recent parabolic rise relative to gold could indicate the final speculative phase of the rally.
WhiteOak Capital Mutual Fund warned that when silver begins to outperform gold at such speed, it has historically signaled the end of a rally rather than the beginning. The fund house advised investors not to chase prices at elevated levels and instead focus on diversification.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, had earlier cautioned that a major correction in equities could trigger liquidation in precious metals. That scenario now appears to be playing out, as investors rotate funds in response to market volatility.
While the long-term fundamentals for precious metals remain intact, Thursday’s sharp correction highlights how quickly sentiment can shift after periods of extreme euphoria. Analysts believe the coming sessions will be crucial in determining whether the decline turns into a deeper correction or stabilizes at lower levels.
For now, market participants are advised to remain cautious, avoid chasing momentum, and reassess risk exposure as global markets adjust to changing financial conditions.