Gold prices are down about 2.5% today, with silver falling by a similar margin on Monday, February 2, 2026, although both metals have recently experienced a truly wild rally.

Gold plunged 11% and silver crashed 36% on Friday, January 31, 2026, the worst day for precious metals in over a decade, as President Trump's nomination of Kevin Warsh as Fed Chair triggered a $15 trillion liquidation cascade.

JPMorgan closed $10 billion in silver shorts at the exact market bottom while CME margin hikes forced panicked selling, raising questions about whether this was a "natural correction" or a "system rescue operation".​

In this article, I explain why gold prices are falling and why Ron Paul’s gold price prediction points to a staggering level of $20,000 per ounce.

Why Gold And Silver Are Going Down?

Historic Crash: $15 Trillion Wiped in Single Day

Friday, January 31, 2026, will go down in precious metals history. Gold tumbled more than 8% toward $4,900 per ounce before closing at $4,745, down 11% intraday from Thursday's record $5,608 high. Silver proved even more volatile, crashing as low as $78.29 before settling with a 31% loss, the steepest single-day decline since March 1980's Hunt Brothers silver collapse.​

The carnage erased approximately $15 trillion from gold and silver markets, equivalent to half of US GDP. Monday brought continued selling pressure as gold fell another 4-6% to test $4,400 before recovering to $4,750-4,800 range.​

The Damage in Numbers:

• Gold peak: $5,608 (Thursday, Jan 30)
• Gold Friday low: $4,900 (-8 to -11%)
• Gold Monday low: $4,400 (new multi-week low)
• Silver peak: $120-122 (late January)
• Silver Friday low: $78.29 (-36% intraday, -31% close)
• Silver Monday low: $71 (extended selloff)

Despite the brutal correction, gold remains up 6.92% over the past month and a staggering 68.96% year-over-year, while silver still shows gains of 8.41% monthly and 163.59% annually.

Follow me on X for more gold and silver market analysis: @ChmielDk

Kevin Warsh: The Catalyst That Shook Markets

The immediate trigger came Thursday evening when President Trump nominated Kevin Warsh as the next Federal Reserve Chair, replacing Jerome Powell when his term ends in May 2026.

Warsh, a former Fed Governor during the 2008 Financial Crisis, is widely viewed as a monetary hawk who opposed quantitative easing and warned about inflation risks and market distortions. His nomination sent a clear signal: tighter monetary policy ahead, reduced balance sheet expansion, and a stronger commitment to Fed independence from political pressure.​

Ahmad Assiri, Research Strategist at Pepperstone, explains: "Metals underwent a sharp repricing moment on Friday, posting their steepest declines in decades, while US equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term notably refrained from participating in the same panic driven selloff. This reflects what seems to be a shift in macro sentiment following Kevin Warsh's appointment as Powell's successor to lead the Federal Reserve, marking a pivot in policy long term expectations and dollar strength."

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The Great Liquidation: JPMorgan's $10 Billion Mystery

While mainstream media attributed the crash to Warsh's nomination, Polish analyst Maksymilian Bączkowski from Comparic.pl presented explosive evidence of something far more sinister.

"What the market is trying to sell today as 'natural reaction to FED' is either intellectual laziness or conscious disinformation," Bączkowski wrote. "Silver's drop from $121 to around $78 in a few dozen hours was not a correction, it was a brutal rescue operation of the system."

His analysis reveals that major investment banks, with JPMorgan leading, had built massive short positions betting silver's rally was "impossible to sustain." But the market didn't cooperate. At $121 per ounce, unrealized losses on these shorts exceeded $10 billion, with JPMorgan alone accounting for over $5 billion.​

"It stopped being a matter of 'P&L of one bank', started being real threat to CME exchange clearing stability and systemic domino effect risk," Bączkowski explains. "Banks had to close shorts, but couldn't do it in normal conditions because buying back contracts would shoot price to cosmos. They needed one thing: pretext and massive, panicked supply on the other side."

Monday's Recovery: Bullish Pin Bars Emerge

Despite the carnage, Monday's price action offered hope for precious metals bulls. After extended morning selling that pushed gold to $4,400 and silver to $71, both metals staged powerful recoveries.

Silver's Dramatic Bounce

Silver, which opened Monday testing $71, down nearly 42% from its $122 peak, recovered sharply to $83 by afternoon, trimming losses to just 2% on the day. Indian silver ETFs, which had hit 20% lower circuit limits early Monday, recovered nearly 10% by mid-session.

When I said silver moved too far from its moving averages, I didn't expect it would return to the 50 EMA in one day, but that's what happened Friday. Monday's session also initially brought a pullback to around $71 per ounce, but at time of writing silver is losing only 2% and changing hands at $83 per ounce, holding above the 50 EMA as well as local highs from late 2025.

Silver price today. Source: Tradingview.com

The psychological $80 level proved critical support. If Monday's session closes near current levels, silver will print a massive bullish pin bar, a long wick from $71 to $120+ with a small body at $83, a powerful technical signal suggesting buyers are defending this zone.​

Gold Finds Support at $4,800

Gold followed a similar pattern. After falling to $4,400 Monday morning, the lowest since early January, the yellow metal recovered nearly $400 to trade around $4,800, down just 2.5%.

From my technical analysis of gold, the situation on the chart closely resembles that of silver. Prices clearly bounced off the 50 EMA as well as the support zone marked by highs tested at the turn of last and current year. Another important support I identify in the zone of the psychological $4,000 level extending to $3,900 per ounce, the lows from early November combined with the E200 MA.

Technical Outlook: Pin Bars Signal Reversal?

On both silver and gold, if the day closes at such levels, we will get a huge bullish pin bar with a very long wick and a small body, which for fans of technical analysis will be a strong buy signal.

Key Technical Levels:

Ahmad Assiri identifies gold's $4,600 as "a highly important key level in short term price action," while maintaining that "$6,000 level is still a possible target for the year 2026" despite the correction.

Gold Price Prediction: Gold Heading to $20,000 as "Fiat System Dies"

While short-term traders panicked, former Congressman and Liberty Report host Ron Paul doubled down on his ultra-bullish long-term thesis.

In a January 27 interview with The David Lin Report, just days before the crash, Paul warned: "The fiat monetary system is dying" and predicted gold could reach $20,000 or even $100,000 as the dollar collapses.​

Paul's argument focuses on structural monetary system breakdown rather than short-term Fed policy shifts. His decades-long advocacy for sound money and warnings about fiat currency debasement suggest the current correction merely represents noise within a much larger secular bull market for precious metals.

This is an even more extreme forecast than the one Robert Kiyosaki presented for silver, when he claimed it would rise to $200 per ounce in 2026.

Gold and Silver Price Analysis, FAQ

Why are gold and silver falling today?

Gold fell 11% and silver crashed 36% on January 31, 2026, primarily due to Kevin Warsh's nomination as Fed Chair, a hawkish policy shift strengthening the dollar and reversing the "debasement trade."

What caused the silver crash?

Silver's 36% single-day crash, worst since March 1980, resulted from Warsh nomination, CME margin increases, and what analyst Maksymilian Bączkowski calls a "brutal rescue operation" where JPMorgan closed $10 billion in short positions (3.17 million ounces) at precisely $78.29, the exact bottom.

Will gold and silver continue falling?

Technical analysis shows bullish pin bars forming with silver recovering from $71 to $83 and gold from $4,400 to $4,800 on Monday, suggesting support is being defended. Pepperstone's Ahmad Assiri identifies gold $4,600 as critical support with $6,000 still possible for 2026, while Ron Paul maintains $20,000-$100,000 long-term targets.

Is this a good time to buy gold and silver?

Both metals are testing critical support levels ($80 silver, $4,600-4,800 gold) after 30-40% corrections from peaks, with massive bullish pin bars forming. However, extreme volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term persists with Monday seeing 20% intraday swings in silver ETFs.