Gold slips 7% to $4,515/oz as silver plunges by 14% to $73 with over $4T wiped off market cap

The S&P 500 gained 1.4% in January, on track for an 18% annualized return if momentum holds, but under the surface, things are looking far more complicated.

The Citi U.S. Economic Surprise Index is near a two-year high, profit margins are running hot, and earnings continue to beat expectations, yet the index barely budged after its January 3rd peak and has gone mostly sideways since Halloween.

At the same time, silver and memory-chip stocks unraveled last week in a momentum wipeout that’s now bleeding into broader risk assets.

Friday’s silver crash and gold pullback came as the dollar rebounded off a four-year low, while Sandisk lost over $100 from its intraday high despite strong earnings.

The iShares Silver ETF (SLV) traded dollar volume equal to half its AUM in a single day, showing just how intense the unwind was.

Bitcoin’s drop below $80K, the chaotic action in currencies, and whiplash in software and card processors like Visa and Mastercard all point to an uneasy shift.

The once untouchable “Magnificent 7” stocks have stalled, and semiconductors are now being pitched against software in what Jeff DeGraaf at Renaissance Macro calls a setup to fade momentum. He notes tech’s momentum factor just hit the top 5% of readings since 2000, signaling it’s time to bet on a reversal.

Positioning is also raising eyebrows. Deutsche Bank says cyclicals now outweigh mega-cap growth in investor portfolios, a rare flip.

And Ed Clissold at Ned Davis Research found that when over 60% of S&P stocks beat the index (currently 62%, highest since 2001) the index tends to underperform, with small caps and staples stepping up.

After gold futures collapsed over 11% on Friday, closing well below $5,000/oz, some of the biggest names on Wall Street are now telling investors to load up.

The plunge followed Donald Trump’s nomination of Kevin Warsh to lead the Fed, which pulled the rug out from the precious metals rally by easing fears around central bank independence.

By Monday, gold futures briefly bounced, trimming overnight losses before slipping 0.5% lower. But according to JPMorgan’s Gregory Shearer, this dip won’t last.

Shearer hiked his year-end price target to $6,300/oz, calling gold a “multi-faceted portfolio hedge” that’s benefiting from a structural rotation into real assets.

Michael Hsueh at Deutsche Bank echoed that view, doubling down on his $6,000/oz target for 2026, and said investors’ reasons for holding gold haven’t changed.

He dismissed comparisons to past collapses in 1980 and 2013, saying the current setup still supports a longer-term rally.

South Korean markets plunged Monday, forcing a temporary trading halt after the Kospi 200 futures dropped 5%.

The Kospi index itself slid more than 4%, dragged down by major tech stocks SK Hynix, which dropped by 6.66% and Samsung Electronics fell 5.55%. The Kosdaq, home to smaller-cap stocks, also lost 4.45%.

The sell-off rippled across Asia but didn’t hit every market equally. Japan’s Nikkei 225 eked out a 0.13% gain, and the Topix rose 0.52%, but Hong Kong’s Hang Seng fell 1.64%, and China’s CSI 300 slipped 0.68%. Australia’s ASX 200 lost 1%.

The risk-off mood spilled into U.S. futures, with the Dow down 143 points, or 0.3%, while the S&P 500 dipped 0.6% and the Nasdaq-100 shed nearly 1%.

Bitcoin dropped to $76,700, falling below $80,000 for the first time since April, as investors continued pulling out of risk assets after the brutal collapse in gold and silver.

Gold lost another 6% to $4,538/oz on Monday, deepening Friday’s nearly 10% plunge below $5,000, as the rally that pushed prices to record highs just days ago completely unraveled.

Silver dropped 14% to $73, still reeling from Friday’s 30% crash, which is its worst single-day loss since March 1980.

The sell-off accelerated after Kevin Warsh was tapped by President Donald Trump to replace Jerome Powell as Fed chair, shocking markets and boosting the dollar.

Warsh’s record of backing tighter monetary policy pushed the dollar index up 0.8% since Thursday, making metals less appealing for foreign buyers and raising the appeal of Treasurys over gold.

Then came Trump’s comments on a potential deal with Iran, which helped global crude oil prices fall by 4%, adding to the safe-haven exodus.

Despite the historic rout, gold is still up 8% and silver 16% year to date, thanks to last year’s explosive gains of 65% and 145%, respectively. But Forbes warned prices will stay volatile as traders wait for Warsh to clarify his direction.