Silver and gold prices experienced historic sell-offs after the announcement of a new Federal Reserve chair nominee sparked a strong dollar and massive profit-taking in commodity markets, dragging Bitcoin and other assets lower as risk sentiment deteriorated.
Precious metals markets faced catastrophic losses at the end of January, with silver tumbling as much as 36% intraday — marking its biggest single-day drop on record — and gold sliding more than 12%, wiping out trillions of dollars in market value within a single session. The sell-off was triggered by the announcement that Kevin Warsh had been nominated to lead the U.S. Federal Reserve, boosting the dollar and reversing the recent bullish run in metals prices.
The rout in metals erased over $15 trillion in combined market value for silver and gold, in what analysts described as one of the most dramatic drawdowns in decades. Forced selling and margin calls fuelled the acceleration, as leveraged positions were abruptly unwound when key support levels broke under heavy pressure.
This bout of volatility spilled into broader financial markets, rattling stocks and commodities alike. In addition to gold and silver, oil, copper and other industrial metals also experienced steep declines, reflecting widespread risk-off sentiment as investors recalibrated expectations around interest rates and U.S. monetary policy.
Mizuho’s forecasts and key assumptions
Cryptocurrencies were not immune. Bitcoin slid to around $82,000, its lowest in nine months, as digital asset holders also de-risked positions amid the panic. The synchronized sell-off raised questions about whether Bitcoin would follow precious metals into deeper lows or diverge and recover more swiftly as markets adjust.
Some analysts suggest that the sharp drop in precious metals could present a buying opportunity if markets stabilize and broader economic uncertainties ease. Others warn, however, that volatility could persist until clarity emerges on U.S. monetary policy and dollar strength.
For Bitcoin, views vary: some strategists believe the digital asset could outperform traditional safe havens as investors seek alternatives, while others argue that crypto markets remain vulnerable in periods of heightened risk aversion.
In the short term, markets appear poised for continued turbulence, with positioning data, institutional flows and macroeconomic signals playing crucial roles in determining how prices evolve across asset classes. Sentiment remains fragile, and while some see potential long-term opportunities, near-term risk is unmistakably elevated.
