The global precious metals market experienced one of the most violent selloffs in history, with gold and silver losing a combined $4.02 trillion in market capitalization in a single trading day, according to analysts. The collapse extended a brutal three-day stretch that has already wiped more than $10 trillion from the sector, underscoring the scale of the shock hitting what are traditionally considered safe-haven assets.
Gold prices fell sharply below $4,400 per ounce, while silver dropped under $71.5, breaching multiple technical support levels in rapid succession. The selloff intensified as liquidity thinned and volatility surged across futures and spot markets worldwide.
Spot gold was hit particularly hard, sliding below $4,400 per ounce for the first time since January 9 and closing the day down 7.9%, one of its steepest daily declines on record.
What triggered the historic collapse
Analysts point to a combination of forced liquidations, extreme leverage, and crowded positioning following months of relentless gains in precious metals. As previously covered, gold and silver had surged to record levels amid currency weakness, central bank buying, and strong speculative inflows, leaving markets highly vulnerable to abrupt reversals.
Once prices broke below key thresholds, margin calls and algorithmic selling accelerated the decline. Futures markets amplified the move as traders rushed to reduce exposure, while physical markets struggled to absorb the sudden wave of selling pressure.
Silver’s losses were compounded by its higher volatility and thinner liquidity compared with gold. The metal’s dual role as both an industrial input and a monetary asset made it especially sensitive to shifts in risk sentiment, exacerbating intraday swings.
Market fallout and emergency measures
The scale of the volatility prompted intervention in some markets. In Thailand, authorities temporarily suspended online trading of gold futures on the Thailand Futures Exchange (TFEX) as price swings reached destabilizing levels. The move highlighted growing concerns about orderly market functioning amid unprecedented turbulence.
For investors, the episode has shattered assumptions about the stability of precious metals during periods of stress. While gold and silver are often viewed as defensive assets, the past three days have shown that extreme positioning and leverage can turn even safe havens into sources of systemic risk.
The combined $10 trillion loss over three days rivals some of the largest market drawdowns in modern financial history, placing the precious metals rout alongside major equity and credit crises in terms of scale.
Looking ahead, analysts expect volatility to remain elevated as markets attempt to find a new equilibrium. Attention will focus on futures positioning, margin requirements, and whether physical demand can re-emerge at lower price levels.
While long-term demand drivers such as reserve diversification and inflation hedging remain intact, the current episode serves as a stark reminder that no asset is immune to violent repricing when market structure breaks down. Analysts say this collapse will likely be studied for years as a case study in how rapidly sentiment and liquidity can reverse — even in the oldest markets in the world.