Market experts say the recent fall in gold and silver prices is temporary. Analysts from Deutsche Bank, CPM Group, Fairlead Strategies, and Interactive Brokers explain the move. They say the drop does not signal a long-term crash.
New Delhi: Gold and silver prices saw a sharp and historic fall in early February 2026, which worried many investors and led to heavy online searches about why prices crashed and whether it was time to panic. Gold prices fell by as much as 10%, while silver prices dropped more than 30% in a very short time. However, market experts say this fall is not a long-term crash and should be seen as a temporary correction.
Below is a full and simple explanation of what caused the fall, how prices reacted, what experts are saying, and what investors can expect next. This analysis is based on official market data and expert views available till February 3, 2026.
What Happened: The Big Fall in Gold and Silver Prices
Gold and silver saw one of their worst sell-offs in decades, starting on Friday, January 30, 2026. Prices dropped sharply within just a few hours, shocking global markets.
Gold prices fell by up to 10% in a single day. They were heading toward their worst two-day fall since 1980.
Silver prices dropped even more sharply. They fell by 30–36% during the day, and some reports showed losses of up to 60% at one point.
The crash wiped out all the gains silver had made in 2026. It became one of the steepest declines seen in decades.
By February 3, 2026, prices started recovering. Gold rose by 2.2–3% and traded around USD 4,767–4,770 per ounce.
Silver jumped 5.9–8.81% and moved to about USD 83.79–84.09 per ounce. This rebound suggested that the worst phase of the fall may have passed.
Why Did Gold and Silver Prices Crash?
The main trigger for the sudden fall was US President Donald Trump’s decision to nominate Kevin Warsh as the next Chair of the US Federal Reserve on January 30, 2026. Markets saw this as a signal of tighter monetary policy in the future.
Kevin Warsh is known as someone who is less supportive of very easy monetary policies, such as low interest rates and heavy money printing. Because of this, investors expected higher real interest rates and a stronger US dollar. Gold and silver do not earn interest, so they usually lose attraction when interest rates rise.
Other factors also added to the pressure. Many investors reduced positions ahead of the weekend, hedge funds sold large holdings, and index funds adjusted their portfolios. On top of this, the CME Group increased margin requirements on Comex gold and silver futures, forcing traders to sell more to meet margin calls.
The US dollar strengthened sharply, which hurt commodity prices across the board and caused a chain reaction in metals and stocks. Experts say the fall was more of a market shock and position reset, rather than a change in the basic long-term reasons for holding gold and silver.
Why Experts Say Don’t Panic
Even though the fall looked alarming, most analysts agree that it is short-lived and does not signal a long-term decline. They advise investors not to panic sell.
Analysts at Sucden Financial said the drop is likely temporary and that gold and silver still remain attractive in the long term due to inflation risks and global uncertainty. They expect a modest recovery in prices in the coming days.
| Expert | Organisation | Date & Source | Key View |
|---|---|---|---|
| Michael Hsueh | Deutsche Bank (Metals Analyst) | Research note, Feb 1, 2026 | Said the recent fall in gold prices does not indicate long-term weakness. He maintained his year-end gold target of USD 6,000 per ounce and said market conditions do not support a long-term reversal. According to him, the fall was caused by market volatility, not a loss of investor confidence. |
| Jeffrey Christian | CPM Group (Managing Director) | Market analysis report, Feb 2, 2026 | Said gold and silver prices may remain weak in the short term, but concerns around inflation, a strong US dollar, and economic risks will continue to support demand. He added that industrial demand for silver will stay strong and could keep prices higher through 2026. |
| Katie Stockton | Fairlead Strategies | Bloomberg interview, Feb 2, 2026 | Said markets could see 8–9 more weeks of correction, but she is not worried. She compared the movement to sharp swings in AI stocks and said technical indicators show the phase is temporary. |
| José Torres | Interactive Brokers (Senior Economist) | Economic commentary podcast, Feb 1, 2026 | Explained that gold and silver had risen faster than fundamentals, making them vulnerable to a pullback. However, he stressed this does not mean a long-term crash, as such falls are usually caused by short-term factors. |
Some experts advised caution and said investors should not rush to buy immediately due to possible volatility, but the overall view remains positive.
Broader Market Impact and Signs of Recovery
The sudden crash created a domino effect across markets and shocked many investors. However, hedge funds and long-term investors also began positioning to buy at lower levels.
The strong rebound seen on February 3, with gold rising up to 3% and silver nearly 9%, suggests that the earlier fall was excessive. This recovery shows that the market correction was overdone and not a sign of deep trouble.
History, Context, and What Lies Ahead
This fall marked gold’s worst two-day drop since 1980 and wiped out silver’s gains for 2026. Still, history shows that precious metals often recover quickly after policy-driven shocks.
Analysts note that similar drops in the past led to strong rebounds. Industrial demand continues to support silver and is expected to remain strong through 2026.
Looking ahead, experts expect some short-term volatility, but remain positive in the long run due to inflation risks, concerns around the US dollar, and gold and silver’s role as safe-haven assets. Deutsche Bank continues to hold a USD 6,000 per ounce gold target.
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