Gold and silver prices collapsed sharply, wiping out more than $6 trillion in notional market value in the last 24 hours. This move came after days of relentless upside, where gold price and silver price had been printing fresh all-time highs almost daily. That streak ended abruptly as heavy selling hit metals markets, dragging prices lower and ending what had looked like an unstoppable run.
The speed of the decline caught attention because gold and silver had not shown visible weakness before the liquidation began. Market structure changed fast once selling pressure intensified, turning a controlled pullback into a violent reset.
Gold price and silver price had climbed to historically stretched levels before the crash. Gold had gained around 160% over the past 2 years, with silver up close to 380% over the same period. Those gains placed both metals deep into overextended territory. When prices reached these levels, downside risk increased sharply once buying slowed.
Bull Theory noted the scale of the move, noting gold fell about 8.2% and erased nearly $3 trillion from its market cap. Silver dropped roughly 12.2% and wiped out about $760 billion. Equity markets also moved lower during the same period, which added to the intensity of the selloff.
WHAT IS THE REASON BEHIND THIS MASSIVE CRASH?
— Bull Theory (@BullTheoryio) January 29, 2026
1) Too much leverage & margin calls – Traders went crazy with high leverage 50x–100x in futures. A small dump turned into forced selling, which started a chain of liquidations wiping out trillions in paper gains.
2) Profit taking… https://t.co/aLixIPGobu
What you'll learn 👉
Excessive Leverage Turns A Pullback Into A Cascade
Leverage played a central role in accelerating losses. Bull Theory pointed out that futures markets had built extreme leverage, with positions often running at 50x to 100x. That structure left little room for price swings. Once gold and silver prices slipped, margin calls forced positions to close automatically.
This chain reaction pushed prices down faster than spot selling alone could explain. Paper gains vanished quickly as leveraged traders exited under pressure. The result was a liquidation wave rather than a gradual correction.
Profit Taking Follows A Parabolic Gold And Silver Rally
Profit taking also contributed to the move. Gold and silver had risen almost vertically over recent months. When assets move that far that fast, early buyers tend to lock in gains once momentum stalls. That behavior adds supply at exactly the wrong time.
Bull Theory described the crash as post-unwinding rather than a reaction to a major policy change or geopolitical shock. No single event triggered the selloff. Positioning and market structure did the damage.
Banking Stress And High Rates Add Pressure To Gold Price
Alex Mason linked part of the gold price decline to ongoing stress in the US banking system and restrictive interest rates. Banks still carry large unrealized losses on long dated bonds purchased during the zero rate era. Those losses remain manageable as long as liquidity holds.
🚨 THE REASON GOLD IS DUMPING TODAY IS THE U.S. BANKING CRISIS.
— Alex Mason 👁△ (@AlexMasonCrypto) January 29, 2026
Look at the chart. $337B IN LOSSES. American banks are dying.
Banks loaded up on long dated bonds when rates were near zero.
Treasuries. MBS. “Safe” assets.
Then the Fed delivered the FASTEST rate hikes in modern… pic.twitter.com/VMFjh4utPd
High rates change the equation for gold. When real yields stay elevated, the opportunity cost of holding non yielding assets rises. Liquidity tightens. Gold price reacts to those conditions faster than longer term balance sheet stress. Alex Mason emphasized that this does not erase banking risks. It shows that tight liquidity dominates short term price action.
Broader Market Weakness Amplifies The Metals Selloff
Equities also declined during the same window. Bull Theory noted sharp losses across the S&P 500 and Nasdaq, with hundreds of billions erased from market value. That broader weakness reduced risk appetite across asset classes. Gold and silver did not trade in isolation during this move.
DeFi Tracer described the event as a rapid de leveraging cycle driven by cascading margin calls and forced selling. The speed of the move reflected market structure rather than panic driven headlines.
Read Also: BNB Price Outlook: History Repeats at This Level – Is Another Bounce Coming?
Gold price and silver price now face a reset after an extraordinary rally. The liquidation cleared excess leverage and cooled overheated conditions. Volatility may remain elevated as markets digest what just happened.
This move looks less like a breakdown and more like a hard reset following extreme positioning. What comes next depends on liquidity, rates, and how quickly confidence stabilizes across metals and broader markets.
Subscribe to our YouTube channel for daily crypto updates, market insights, and expert analysis.
