Silver price crash: Why precious metals witnessed one of the worst corrections in decades on Friday, January 30

Meanwhile, spot gold slipped around 9% to trade at $4,895.22 an ounce. Gold futures dropped 11.4% to settle at $4,745.10.

According to analysts, aggressive profit-taking followed the sharp rally to record highs earlier this month.

The key trigger behind the steep decline was President Donald Trump’s nomination of Kevin Warsh as the next US Federal Reserve Chair.

Why Warsh's nomination as Fed chief spooked commodity traders

The nomination of Kevin Warsh as the next US Federal Reserve chief spooked commodity markets, as investors viewed him as a hawkish policymaker likely to prioritise inflation control and maintain tighter monetary conditions.

This shifted expectations toward higher interest rates for longer, boosting US bond yields and strengthening the dollar. Since commodities are priced in dollars and do not offer interest income, a stronger dollar and higher yields reduce their attractiveness, particularly for precious metals such as gold and silver.

The reaction was amplified by heavy speculative positioning following a strong rally, prompting rapid profit-booking and forced liquidation. As a result, commodity prices fell sharply, reflecting a sudden change in sentiment rather than a deterioration in underlying supply-demand fundamentals.

Margin hike on gold, silver trades

According to news reports, the CME has announced a second margin hike in three days for all precious metals, with maintenance margins set to rise by 33% for gold futures, 36% for silver futures, 25% for platinum futures, and 14% for palladium futures, effective Monday, February 2, 2026.

The increase means those who want to trade futures of gold, silver, platinum and palladium will need to put up more collateral to ensure they can meet their obligations. While the exchange routinely raises margins when a contract is soaring, sliding or extremely volatile, Friday’s move could further edge out smaller players who don’t have enough cash to make the necessary deposits, explain analysts.

Gold, silver in domestic market

In the domestic market too, gold and silver prices crashed.

Gold prices tumbled by ₹14,000 per 10 grams, and silver prices tanked by ₹20,000 per kg in the national capital on Friday as investors booked heavy profits amid weak global trends and a rebound in the US dollar.

According to a report by PTI, gold of 99.9% purity plunged by ₹14,000, or 7.65%, to ₹1,69,000 per 10 grams (inclusive of all taxes). The precious metal had hit an all-time high of ₹1,83,000 per 10 grams on Thursday, after rising by ₹12,000.

Silver tumbled by ₹20,000, or nearly 5%, to ₹3,84,500 per kilogram (inclusive of all taxes). The white metal had soared ₹19,500 to hit a record of ₹4,04,500 per kg in the previous market session.

"Gold and silver experienced a significant correction on Friday as investors moved to aggressively book profits following a recent record-breaking rally.

"This decline was mainly fuelled by the heavy liquidation of long positions by large institutional players, who sought to secure gains after a strong multi-session advance," PTI reported, quoting a commodity analyst.

Outlook

Analysts note that despite the recent pullback, the outlook for the precious metals remains robust, supported by central bank gold buying, silver’s supply deficits amid rising industrial demand from green energy, EVs, AI, electronics, and solar, as well as ongoing geopolitical risks and continued diversification away from fiat currencies.

What Economic Survey 2026 said on gold and silver

Gold and silver prices are expected to remain at elevated levels amid persisting global uncertainties, unless a durable peace is established and trade wars are resolved, according to Economic Survey 2025-26.

The survey highlighted that both gold and silver touched lifetime highs during 2025, reflecting heightened global uncertainty and strong safe-haven demand.

The rally was buoyed by a weakening US dollar, expectations of persistently negative real rates, and the market's growing assessment of geopolitical and financial tail risks.

"The prices of precious metals, both gold and silver, are likely to continue increasing due to their sustained demand as safe-haven investments amid global uncertainties, unless a durable peace is established and trade wars are resolved," said the survey tabled in Parliament.