Gold and Silver Crash Sparks Panic: Is This 1980’s ‘Silver Thursday’ Moment Repeating?
Indian precious metals markets witnessed a historic collapse on January 30, with gold and silver futures recording their steepest single-day fall since March 1980. What began as a global sell-off quickly turned into a full-blown rout, wiping out weeks of gains in just a few hours and jolting traders who were positioned for continued upside.
The trigger was global—but the impact was brutal at home. Following the announcement by Donald Trump nominating Kevin Warsh as the next US Federal Reserve chief, fears of a prolonged tight monetary regime sent shockwaves across commodity markets. Indian futures reacted sharply, with gold plunging 17.5% and silver collapsing 27% on the Multi Commodity Exchange (MCX).
Here’s What Happened Today and Why Traders Reacted
The selling intensified within hours of the Fed-related news hitting global markets. Traders rushed to unwind leveraged positions, triggering margin calls and accelerating the fall.
Key intraday developments included:
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Gold futures tumbling below ₹1.55 lakh per 10 grams
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Silver futures crashing below ₹3 lakh per kg
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Heavy liquidation across commodity ETFs and futures
Market participants said the speed of the fall left little room for orderly exits. Once key support levels were breached, algorithmic selling and stop-loss triggers added fuel to the decline.
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Fed Shock Triggers a Global Precious Metals Rout
The appointment of Kevin Warsh, widely viewed as a hawkish policymaker, altered expectations around US interest rates. Traders began pricing in:
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Higher-for-longer interest rates
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Stronger US dollar
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Rising US bond yields
These factors are traditionally negative for non-yielding assets like gold and silver. As bond yields rose and the dollar strengthened, global investors rapidly rotated out of precious metals.
On the COMEX, gold April futures slipped to $4,763 per ounce, while silver March futures dropped sharply to $78.32 per ounce, confirming a synchronized global sell-off.
Indian Futures See Brutal Price Damage on MCX
The global sell-off translated into extreme moves in Indian futures markets.
On MCX:
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Gold April futures closed at ₹1,53,119 per 10 gm, down from ₹1,85,779 a day earlier
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Silver March futures settled at ₹2,91,925 per kg, crashing from ₹3,99,893
Silver’s fall was particularly severe due to higher speculative positioning and thinner liquidity. Traders noted that silver’s dual role as an industrial and precious metal made it more vulnerable during risk-off episodes.
Echoes of ‘Silver Thursday’ Shake Market Confidence
Veteran traders were quick to draw parallels with March 27, 1980 — “Silver Thursday”, when silver collapsed after touching $50.35 an ounce and eventually halved within days as exchanges tightened trading rules.
Back then, gold had peaked near $850 per ounce before crashing. Friday’s price action evoked similar fear-driven unwinding, as leveraged positions were flushed out at record speed.
“This felt like forced liquidation rather than rational price discovery,” said a senior commodities trader. “Once momentum turned, there were no buyers willing to step in.”
ETF Profit Booking Accelerates the Fall
The sell-off was amplified by heavy profit booking in exchange-traded funds.
Data from the World Gold Council showed that:
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Assets under gold ETF management surged 260% between January 2024 and January 2026
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Total ETF holdings rose to $558 billion from $214.5 billion
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Net inflows in 2025 stood at $88.56 billion, following outflows in 2023
With such sharp accumulation, Friday’s macro shock prompted investors to rush for the exit, intensifying the fall.
Despite the Crash, Year-to-Date Gains Still Survive
Even after Friday’s collapse, precious metals have not completely lost their yearly gains:
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Gold remains up 13% in 2026
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Silver is still higher by 18.5% year-to-date
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Platinum, despite a 19% fall, is up 2.5% this year
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Palladium fell 15% on the day but remains up over 3%
This suggests that the fall, while extreme, is partly a correction of an overheated rally rather than a complete trend reversal.
What This Means for Traders in the Near Term
For traders, the message is clear: volatility has returned with force.
Short-term implications include:
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Wider intraday swings and higher margin requirements
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Increased risk of forced liquidation
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Greater sensitivity to US macro and Fed-related headlines
Until clarity emerges on US monetary policy direction, precious metals are likely to remain highly volatile and headline-driven.
What Long-Term Investors Should Reassess Now
For investors, the crash is a reminder that even “safe-haven” assets are not immune to sharp corrections.
Portfolio considerations include:
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Reviewing overexposure to gold and silver ETFs
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Avoiding leveraged positions in volatile commodities
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Using staggered buying rather than lump-sum allocation
As one market strategist put it, “Gold protects against uncertainty—but it does not protect against crowded trades.”
The Bottom Line: A Wake-Up Call for the Precious Metals Trade
Friday’s crash was not just about prices—it was about positioning, leverage, and shifting macro expectations. The Fed shock changed the narrative overnight, turning optimism into panic.
While geopolitical risks remain unresolved, the prospect of a stronger dollar and higher yields has forced markets to rethink the precious metals story. Whether this proves to be a temporary shakeout or the start of a deeper correction will depend on how quickly global monetary expectations stabilise.
