Historic Gold & Silver Price Crash Explained

Updated: January 30, 2026 | 3:00 PM PKT

The Breaking News about Gold and silver prices is everywhere: Biggest Single-Day Crash in 13 Years. The gold and silver markets just experienced their most dramatic collapse since 2013. We bring this guide at the demand of our readers who want to know everything about the last Gold and Silver crash. Please visit https://verifiedinsightspk.com/gold-price-daily-rates/ to check the latest updates on Gold Price and Silver Price in real time.

Here is what happened in the last 24 hours.

Gold Price Collapse

Thursday’s Record High: $5,594.82 per ounce (all-time high)
Friday’s Crash Low: $4,941 per ounce
Total Drop: 8% in one day ($653 per ounce)
Current Price: ~$5,006 per ounce (still down 6.88%)

In Pakistan:

24K gold dropped approximately Rs. 25,000-30,000 per tola in one day
This is the sharpest single-day decline in Pakistan’s gold market history

Silver Price Devastation

Thursday’s Peak: $120 per ounce (historic high)
Friday’s Crash Low: $95 per ounce
Total Drop: 17% in one day ($25 per ounce)
Current Price: ~$98 per ounce

In Pakistan:

Silver lost Rs. 8,000-10,000 per tola overnight

The Scale of This Crash

To understand how shocking this is, consider:

$5.9 TRILLION in market value vanished in just ONE HOUR
This matches the infamous April 2013 gold crash (-9%)
Silver’s 17% drop is the worst since the March 2020 COVID panic
Over $1 billion in leveraged positions were wiped out instantly
This is being called a “capitulation event” by traders worldwide

What Caused This Historic Collapse? The Three Triggers

1. CME Exchange Margin Hikes (The Main Trigger)

The Chicago Mercantile Exchange (CME) suddenly increased margin requirements:

Silver margins raised 25% overnight
Gold margins increased significantly
This forced massive “deleveraging” – traders had to sell immediately to meet new requirements

What this means in simple terms: Traders who borrowed money to buy gold/silver had to either deposit more cash instantly or sell their positions. Most chose to sell, creating a cascade of panic selling.

2. Kevin Warsh Fed Chair Nomination

President Trump announced Kevin Warsh as his nominee for Federal Reserve Chairman:

Warsh is known as a “hawk” – he opposes easy money policies
Markets fear less monetary stimulus under his leadership
Strong dollar expectations hurt gold (gold and dollar move in opposite directions)
Non-yielding assets like gold become less attractive when interest rates might rise

3. Massive Profit-Taking After Historic Rally

Gold had surged 24% in January alone – the strongest monthly gain since the 1980s:

After hitting all-time highs, professional traders took profits
“Buy the rumor, sell the news” mentality
Algorithmic trading systems triggered automatic sell orders
Retail investors panicked and sold at losses

Understanding the Bigger Picture: Why Gold Surged Before the Crash

To understand where we are, you need to know how we got here:

The 2025-2026 Gold Rally

January 2026 alone:

Gold surged from ~$4,250 to $5,594 (24% gain in one month)
Silver rocketed from ~$75 to $120 (40% year-to-date gain before crash)

What drove the rally:

Dollar Weakness

The US dollar hit 4-year lows
The Trump administration signalled tolerance fora weak dollar
Investors fled dollar assets into gold

Geopolitical Chaos

Iran tensions escalating
Trump threats against Cuba, Iran, potential annexation of Greenland
The EU designated Iran’s Revolutionary Guard as a terrorist organisation
Middle East instability at peak levels

Central Bank Buying

China, Russia, India, and other BRICS nations are buying massive gold quantities
“De-dollarisation” trend – countries reducing dollar dependence
Central banks purchased 1,000+ tonnes annually (2023-2025)

Economic Uncertainty

Federal Reserve policy confusion
Trump criticizing Fed independence
Tariff threats against Mexico, Canada, and allies
Government shutdown fears
Inflation concerns

Technical Breakout

Gold breaking the $5,000 psychological barrier triggered algorithm buying
Silver breaking $100 created a momentum surge
Short squeeze forced short-sellers to buy, pushing prices higher

What Happens Next? Market Outlook for the Coming Weeks

Short-Term (Next 1-4 Weeks): High Volatility Expected

Key levels to watch:

Gold:

Critical support: $5,000 – If gold holds above this psychological level, recovery is likely
Next support: $4,800-4,900 – Strong technical support zone
Danger zone: $4,500-4,700 – Breaking this could trigger a deeper correction

Silver:

Critical support: $100 – Psychological and technical level
Next support: $93 – January 14 peak, strong support
Deeper support: $70-80 – Late 2025 highs, major support zone

Volatility will remain EXTREME for at least 2-4 weeks as markets digest this shock.

Medium-Term (2-6 Months): Likely Consolidation

Two possible scenarios:

Scenario A: V-Shaped Recovery (40% probability)

Gold quickly rebounds to the $5,200-5,400 range
Fundamentals (dollar weakness, geopolitics, central bank buying) remain strong
Crash seen as “healthy correction” and buying opportunity
Timeline: 4-8 weeks

Scenario B: Extended Correction (60% probability)

Gold consolidates between $4,700-5,200 for several months
Market needs time to digest January’s rapid gains
Could retest $4,500-4,800 support before resuming uptrend
Timeline: 2-4 months

Long-Term (6-12 Months): Still Bullish

Despite the crash, the long-term outlook remains positive:

Major banks’ 2026 targets (STILL VALID):

JPMorgan: $5,000 by Q4 2026, potential $6,000+ longer term
Goldman Sachs: $5,400 base case
UBS: Raised target recently to $5,500+
Some analysts: $6,000-6,200 possible

Why the bullish view persists:

Central bank demand remains strong

755 tonnes expected in 2026 (down from 1,000+ but still elevated)
China, India, and Russia continue accumulating
De-dollarisation trend intact

Dollar structural weakness

US debt levels are unsustainable ($35+ trillion)
Federal deficits continue growing
Global reserve currency diversification is ongoing

Geopolitical risks won’t disappear

Iran-US tensions unresolved
The Ukraine war continues
Trade war risks with tariffs
Political instability globally

Investor demand is recovering

Gold ETFs expected 250+ tonnes of inflows in 2026
Physical bar and coin demand projected 1,200+ tonnes
Retail investors typically buy dips

Inflation hedge appeal

Gold’s role as inflation protection remains unchanged
Central banks globally are still accommodative overall

What Should YOU Do Now? Action Plan for Different Investors

If You Already Own Gold: HOLD (Don’t Panic Sell)

Why holding makes sense:

You are down but not out

Yes, the crash hurts, but gold is still up 18% year-to-date
If you bought before 2026, you’re likely still in profit
Long-term trend remains upward

Panic selling locks in losses

The worst time to sell is during panic
Professional traders are BUYING this dip
History shows gold recovers from corrections

Fundamentals have not changed

The dollar is still structurally weak
Geopolitical risks remain high
Central banks are still buying
Your reasons for owning gold are still valid

What to do:

Check your original investment thesis – is it still valid? (Probably yes)
Review your timeline – if you’re investing long-term, stay calm
Avoid checking prices constantly – it increases emotional decision-making
Consider this: If you believed in gold at $5,500, why sell at $5,000?

Only sell if:

You need the cash urgently for expenses
Gold was always a short-term trade for you
Your financial situation changed dramatically

If You Were Planning to Buy: This Could Be Your Opportunity

The case for buying now:

Significant discount from peak

Gold is 10-12% cheaper than Thursday’s high
Silver is 18% cheaper
Rarely get such sharp pullbacks in one day

Fundamentals support higher prices long-term

All the reasons gold went to $5,600 still exist
This is profit-taking and technical correction, not fundamental change
Long-term targets ($5,400-6,000) are still credible

“Buy the fear” strategy

Markets are panicking – historically good entry points
When everyone is scared, opportunities emerge
Warren Buffett: “Be fearful when others are greedy, greedy when others are fearful”

What to do:

Dollar-Cost Averaging (DCA) Strategy – RECOMMENDED: Instead of buying all at once, split your investment:

Example with Rs. 500,000 to invest:

Week 1: Buy Rs. 100,000 worth (this week)
Week 2: Buy Rs. 100,000 (if price drops further, you benefit)
Week 3: Buy Rs. 100,000 (if price rises, you already have some)
Week 4: Buy Rs. 100,000
Week 5: Buy Rs. 100,000

Why this works:

You avoid buying all at the worst time
You benefit if prices drop more
You don’t miss out if prices recover fast
Reduces the emotional stress of timing

Wait for stabilization:

Don’t rush in first thing today
Let the market settle for 3-5 days
Watch for gold to hold above $5,000
Look for decreasing volatility

Focus on physical gold for safety:

24K gold bars or coins (if investing)
22K jewelry (if you want dual purpose)
Avoid paper gold and futures during volatility
Get proper hallmark certification

If You ‘are New to Gold Investment: Educate Before Acting

This crash is a learning opportunity:

What NOT to do:

Don’t jump in blindly because “it’s cheap now”
Don’t invest money you need in the next 1-2 years
Don’t put all savings in gold
Don’t use leverage or borrowed money
Don’t follow hot tips from social media

What TO do:

Understand why you want gold (hedge? investment? savings?)
Study historical gold price patterns
Decide your allocation (typically 5-15% of portfolio)
Plan your holding period (minimum 3-5 years recommended)
Use our calculator to plan purchases
Research reputable dealers in your city

Recommended approach for beginners:

Start small – invest only 10-20% of what you eventually plan
Learn by doing – observe how prices move
Add more gradually as you understand the market
Think long-term – gold is not a get-rich-quick scheme

If You’re Heavily Leveraged: ACT IMMEDIATELY

If you bought gold/silver on margin or with loans:

Critical actions:

Contact your broker/dealer TODAY
Understand your margin call situation
Deposit more cash if you can afford it
If you can’t, close positions in an orderly way before forced liquidation
Never add more leverage in volatile markets

Learn from this:

Leverage amplifies both gains AND losses
This crash wiped out many leveraged traders
Physical gold has no margin calls
Future rule: Only invest what you can afford to lose

Pakistan-Specific Guidance

How This Affects Pakistan’s Gold Market

Local price impact:

Immediate (already happening):

24K gold: Down Rs. 25,000-30,000 per tola from peak
22K gold: Down Rs. 23,000-27,000 per tola
Silver: Down Rs. 8,000-10,000 per tola

Why do Pakistani prices follow international:

Pakistan imports most gold
Local prices tied to international rates
The dollar-PKR exchange rate adds a factor
Local dealers adjust quickly

Best places to buy in Pakistan:

Karachi:

Sarafa Bazaar (Jodia Bazaar) – most competitive rates
Ensure hallmark certification
Compare 3-4 dealers before buying

Lahore:

Anarkali Bazaar
Shah Alam Market
Get proper documentation

Islamabad:

Blue Area jewelers
F-7 Markaz
Reputable established dealers only

Important For Pakistani Buyers

Making charges matter more now:

The gold price dropped, but the making charges stayed the same
A Rs. 30,000 drop in gold might save you only Rs. 25,000 after making charges
Negotiate making charges during low-demand periods
For investment, buy 24K bars (minimal making charges)

Timing in Pakistan:

Wait 5-7 days for market stabilization
Local dealers adjust prices gradually
Monitor our live rates daily
Don’t rush – opportunity will last weeks

Wedding season consideration:

If the wedding is in the next 2-3 months, this is a good buying opportunity
If the wedding is 6+ months away, can wait for more stability
Spread purchases over several weeks

Pakistani Rupee Strength Helps

Silver lining for Pakistani buyers:

International gold down 8%
If the rupee stays stable or strengthens slightly
You get double benefit (gold drop + better exchange rate)
Monitor USD/PKR on our currency calculator

Expert Opinions: What the Professionals Are Saying

JPMorgan’s View

Still bullish despite the crash:

Maintain $5,000 Q4 2026 target
Potential $6,000 longer term
See this as “healthy correction”
Central bank demand of 755 tonnes in 2026 supports prices
Investor demand 585 tonnes quarterly average expected

Goldman Sachs

Recent upgrade still valid:

$5,400 base case for 2026
Correction doesn’t change fundamentals
Dollar weakness trend intact
Geopolitical premium justified

UBS

Raised targets recently:

Recently upgraded to $5,500+
See structural bull market
This crash is a “buying opportunity”

World Gold Council Warning

Presented four scenarios in December 2025:

Bearish case (-5% to -20%):

If Trump’s reflation succeeds
Fed holds or hikes rates
The dollar strengthens materially
Could see $3,360-3,990 range

Base case (+5% to +15%):

Moderate growth slowdown
Fed cuts modestly
Gold rises steadily

Bullish case (+15% to +30%):

Economic downturn
The Fed aggressively cut
Flight to safety

Current situation:

Crash brings us closer to WGC’s support levels
But fundamentals still lean toward base/bullish scenarios
Correction was needed after 24% monthly gain

What Past Crashes Tell Us

Comparing to Similar Events

April 2013 Crash:

Gold fell 9% in one day
Followed by a multi-month correction
Eventually recovered and made new highs
Lesson: Sharp corrections happen, long-term trend matters

December 2025 Silver:

Silver dropped 8.7% in one day
Recovered within two weeks
Showed resilience

March 2020 COVID Crash:

Gold initially dropped with everything
Recovered fastest of all assets
Went on to a multi-year rally
Lesson: Crisis-driven selloffs reverse quickly

August 2020 Silver:

Dropped 16.85% in one day
Was followed by consolidation
Remained in uptrend longer-term

The Pattern: Severe one-day crashes are typically followed by:

Several days of volatility
Stabilisation around support levels
Gradual recovery over weeks/months
Resumption of primary trend if fundamentals intact

What’s different this time:

Stronger fundamental backdrop (de-dollarisation, central bank buying)
Higher geopolitical risk premium
More structural dollar weakness
Suggests recovery could be faster than past crashes

Conclusion

Yes, this crash is historic. We know it is painful if you bought recently. Yes, it is scary when you see 8% drops in one day.

But remember:

Gold is still up 18% in 2026 despite the crash
Fundamentals (dollar weakness, geopolitics, central bank buying) remain intact
Major banks still project $5,000-6,000+ longer term
This is likely a correction, not a trend reversal
History shows gold recovers from sharp selloffs

So the best strategy is to stay calm if you own gold, be patient if you are buying, think long-term, not daily moves, use this as a learning opportunity, and trust the process and fundamentals.

Stay Updated With Us

We’ll continue monitoring this situation and updating our analysis daily. Please bookmark this page. Live gold and silver rates (updated throughout the day), Daily market analysis and expert commentary, Charts showing price trends and support levels, practical guidance for Pakistani investors, answers to your questions

For questions or concerns, leave comments below or contact us. We are here to help you navigate these volatile times with accurate information and practical guidance.

Disclaimer

This analysis is for educational purposes. Consult with a financial advisor for personalized investment advice.

Verified Insights Pakistan