Crash? Gold Down Over $1,000, Silver Plunges More Than 45%
💬 Hot Market Talk: Are you cutting losses on precious metals or buying the dip? What’s your next move for gold and silver?
Global precious metals markets suffered a “Black Thursday” meltdown, as gold and silver prices crashed sharply, both hitting six-week lows. Escalating geopolitical conflicts in the Middle East sent energy prices soaring, stoking renewed inflation fears and rapidly cooling market expectations for major central bank policy easing — dimming the safe-haven appeal of precious metals.$Gold - main 2604(GCmain)$
Spot gold tumbled as much as 6% during the session, testing the key psychological level of $4,500, marking its lowest level since the sharp sell-off in late January. Gold has now closed lower for seven consecutive trading days, the longest losing streak since 2023. In total, it has retreated more than **$1,000** from its all-time high set in late January.
Silver’s collapse was even more brutal. Spot silver crashed over 10% to break below $66, plummeting more than 45% from its January record peak of $121.65 per ounce — nearly cut in half.
Inflation Haunts Markets, Fed Rate-Cut Expectations Slashed
The immediate catalyst behind the precious metals meltdown was the surge in energy prices driven by escalating Middle East tensions.
Traditionally seen as safe-haven assets, gold and silver were instead pressured by the inflation calculus: rising crude oil and natural gas prices amplified global inflationary pressures, making major central banks more likely to hold or even tighten monetary policy — eroding the appeal of non-yielding gold.
On Wednesday, the Federal Reserve concluded its policy meeting, leaving interest rates unchanged as expected. In its statement, the Federal Open Market Committee (FOMC) stressed heightened uncertainty from the Middle East conflict and now forecasts just one rate cut for this year.
Fed Chair Jerome Powell stated at the press conference that the central bank would need to see convincing evidence of inflation slowing before resuming rate cuts. The Fed raised its 2026 inflation projection to 2.7%. Powell also explicitly said he has no intention of resigning from his position before the U.S. Department of Justice investigation into the Fed is concluded.
The hawkish signals further depressed expectations for looser monetary policy.
Experts Warn: Downside Risks Remain, Safe-Haven Flows Shift to Energy
Patrick Armstrong, Chief Investment Officer at Plurimi Wealth, said:
“Gold is no longer a safe-haven asset — it has become a speculative one. As capital continues to rotate into energy and chemical sectors, metals prices will struggle to find support as long as the conflict persists.”
He noted investors are shifting focus to commodities that directly benefit from geopolitical tensions.
Daniel Ghali, Commodity Strategist at TD Securities, warned further:
“Gold was widely held by institutional investors based on the currency-debasement trade over the past year, but that foundation is now weakening. We remain bearish in the near term; gold has considerable room to correct before testing its bull-trend support.”
Analysts at Sucden Financial also agreed that while precious metals may draw mild support from geopolitical uncertainty, gold’s upside will remain limited as long as crude oil absorbs most safe-haven buying.
U.S. crude oil futures held firm near $97.75 per barrel, while the 10-year U.S. Treasury yield stood at around 4.25%.
The current gold sell-off bears a strong resemblance to the summer of 2022, following the outbreak of the Russia-Ukraine war. Back then, an energy price shock also roiled global markets, paired with aggressive Fed rate hikes, sending gold down 18% from its peak.
Despite Thursday’s heavy losses, gold is still up nearly 7% year-to-date. Silver, however, has turned negative for 2026, down 1%, showing far weaker momentum.
Market analysts believe that if Middle East tensions do not ease in the near term, inflation worries will continue to weigh on precious metals, and gold may test lower support levels.
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