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Gold and silver crashed up to 34 percent from record highs, spooking investors and triggering mass ETF selloffs after Kevin Warsh’s Fed appointment and CME Group margin hikes.
Gold and silver prices crashed sharply from record highs amid panic selling in global bullion markets.
Gold, Silver Crash: The unprecedented gold and silver rallies not only hit an emergency brake but also witnessed a sharp rout, with both commodities plunging by up to 34 per cent from their record highs. One of the worst crashes in bullion history has shaken global markets, reflected in panic selloffs in bullion futures on COMEX.
On Monday, COMEX silver futures were trading at $78 per ounce, a sharp fall from the all-time high of $119 per ounce seen just a few days earlier. Gold futures were also down 2.35 per cent at $4,603 per ounce, compared with the record high of $5,548.30 per ounce.
The crash has spooked investors, triggering a mass exodus from silver and gold ETFs (Exchange Traded Funds) in India.
Gold and Silver ETFs allow investors to invest indirectly in physical gold and silver, where the fund house purchases the metals on behalf of investors while charging a fee for maintenance.
The recent bullion rally had led to a sharp surge in inflows into both gold and silver ETFs. Before the crash, gold and silver had delivered returns of over 100 per cent and 200 per cent, respectively, to investors.
Since the crash, silver ETF prices have fallen sharply by nearly 33.78 per cent. For instance, Groww Silver ETF was trading at Rs 224.62 per unit, down significantly from its high of Rs 357.95 per unit. In gold, Nippon India ETF Gold BeES fell 4.23 per cent on Monday to Rs 117.14 per unit, compared with a high of Rs 147 per unit.
What has triggered this massive selloff?
The initial trigger for the selloff in gold and silver futures was the announcement of Kevin Warsh as the next US Federal Reserve Chair. Known for his pro-Trump and hawkish stance, expectations that the Fed may refrain from lowering interest rates in the coming months intensified selling pressure.
Cooling geopolitical tensions also played a role, with reports suggesting that Iran is willing to negotiate with the US.
However, these factors merely set off a broader cascade that went on to shake global markets.
The major trigger came when CME Group announced a hike in maintenance margin requirements for the second time in three days, forcing traders to liquidate positions ahead of higher collateral demands.
CME Group margin is the money (collateral) traders must deposit to trade futures or options on CME Group exchanges
The selloff extended into Monday as more traders unwound their positions in gold and silver. Meanwhile, a strengthening US dollar further weighed on bullion prices.
The episode has drawn comparisons with the Hunt Silver Crisis of 1980, when silver prices crashed from $21 to below $11 in a single day.
February 02, 2026, 14:49 IST
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