Precious Metals Plunge

Prices of precious metals experienced a sharp decline: silver dropped 30%, gold lost around 10%. Experts have already dubbed this movement the “Death Red Candle” — a technical signal on charts indicating the moment when a drop becomes critical and forces investors out of long positions.

Spot silver fell 28%, settling at $83.45 per ounce, while silver futures plummeted 31.4% to $78.53 per ounce, marking the worst performance since March 1980. Gold also came under heavy pressure: spot gold dropped 9% to $4,895.22 per ounce, and gold futures declined 11.4% to $4,745.10.

Death Red Candle

Reasons for the Sharp Drop

The initial shock in the market was triggered by news that Donald Trump had nominated Kevin Warsh as the next chair of the U.S. Federal Reserve. Investors saw this as a potential signal of possible politicization of the Fed and a review of monetary policy, which increased volatility in precious metals markets.

However, the decline continued in the second half of the trading day on the U.S. market: many investors who had actively purchased gold and silver rushed to take profits. Additional pressure came from the strengthening of the U.S. dollar, which made buying precious metals more expensive for foreign investors and dashed hopes that gold or silver could replace the dollar as the world’s reserve currency.

According to Comex, February gold futures fell 8% compared to the previous day’s high ($5,615 per troy ounce), while March silver futures dropped about 10% from the peak of $120.

Monthly and Annual Performance

Despite the sharp drop, gold still shows significant monthly growth — the largest since 1999. Since the beginning of 2026, as of January 28, February gold futures have increased by 20%, and March silver futures by 66%. This indicates that the current correction does not change the overall positive trend for precious metals at the start of the year.

Expert Analysis

Mikhail Vasilyev, analyst at Sovcombank, links the decline to expectations of the new Fed chair appointment: “Investors assessed the potential independence of the Federal Reserve and the risk of a faster rate cut. As a result, the dollar began to rise, the DXY index increased from 95.7 to 96.4 points, which was one of the factors driving down gold and silver prices.”

Bloomberg notes that the significant price movement is connected to the market’s reaction to Warsh’s nomination news. Alexander Potavin, analyst at Finam, adds that many market participants used the moment to lock in profits after the significant rise in precious metals in January.

What is a “Death Red Candle”

The term comes from technical analysis: a “red candle” on a chart represents a period where the price opens higher but closes lower — meaning the market closes the day with a sharp decline. If the candle is particularly long, it signals strong selling pressure and a potential trend reversal. In the case of silver and gold, long red candles have been a clear indicator of profit-taking and reduced interest in metals amid a stronger dollar.

Investor Guidance

1. Do not panic. Sharp moves in precious metals are normal, especially amid political news and key economic appointments.
2. Review your portfolio. It may be worth adjusting the allocation to precious metals and diversifying.
3. Monitor the dollar. A strong dollar makes metals more expensive for foreign investors and may continue to pressure prices.
4. Long-term perspective. Despite the drop, gold and silver remain strategic tools for protecting capital against inflation and market risks. Corrections do not change the fundamental properties of these assets.
5. Use volatility. For traders, short-term trading on such moves can be profitable, especially with a solid risk management strategy.

Conclusion

Silver and gold have shown the largest drop since 1980, but this can be viewed as a technical correction amid political news and a stronger dollar. For long-term investors, precious metals remain a capital preservation tool, while for traders they offer short-term opportunities. The “Death Red Candle” is a signal of caution, not the end of the trend.