Why Gold and Silver Are Crashing Today
1. The "Kevin Warsh" Effect & Fed Uncertainty
The primary trigger is a shift in Federal Reserve expectations. Reports surfaced that President Trump is set to nominate Kevin Warsh as the next Fed Chair. Warsh is viewed by markets as a "monetary hawk" who might favor higher interest rates and a smaller Fed balance sheet. This has caused a sudden repricing of non-yielding assets like gold.
2. A Resurgent US Dollar
The US Dollar Index (DXY) bounced back sharply today, climbing toward 96.70. Since precious metals are priced in dollars, a stronger greenback makes them more expensive for global buyers, leading to immediate selling pressure.
3. Aggressive Profit-Taking (Peak Euphoria)
Silver had gained over 50% in January alone, and gold was up over 20%. Analysts describe today’s move as a "capitulation event" where investors rushed to lock in life-changing gains after the metals hit "overbought" territory.
4. Liquidation Spills from Tech & Equities
A broader sell-off in US technology stocks (triggered by concerns over AI spending) forced some institutional investors to liquidate their "winners"—gold and silver—to cover losses or margin calls in their equity portfolios.
5. Government Shutdown Averted
Late-night news that a deal was struck to avert a US government shutdown reduced the immediate "panic" demand for safe-haven assets, removing one of the key pillars that supported the rally earlier this week.
Key Stats for your Article
Gold: Dropped from a peak of ~$5,600 to nearly $4,940/oz.
Silver: Crashed from ~$120 to below $95/oz (Worst day since 2013).
MCX (India): Silver fell by a staggering ₹68,000 per kg.
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