Gold has dropped almost 16% in the last two trading days and erased more than $6 trillion in market value.
Silver has fallen nearly 39% in just two days and wiped out around $2.6 trillion in market value.
This is not a normal pullback and such kind of violent dump breaks price structure.
When an asset falls this fast, it usually does not go straight back to new all-time highs. It often needs time to recover.
Here are the main reasons why gold and silver may struggle to make new highs for some time.
1) Uncertainty has dropped
Over the last 3–6 months, the biggest driver for gold and silver was uncertainty around the Federal Reserve.
Markets were betting on a very dovish next Fed Chair who would aggressively weaken the dollar and inject liquidity. That uncertainty is now gone.
Trump has selected Kevin Warsh as the next Fed Chair.
He supports rate cuts, but he does not support large liquidity injections just to inflate asset prices.
This removes one of the strongest reasons gold and silver were rallying.
2) Parabolic trend broken
Silver rallied almost 3x in the last 6–7 months.
Now it has dropped around 40% in a very short time.
In most cases, when a parabolic move breaks like this, the asset does not make a new all time high for months.
Sometimes it takes years. Instead, the price usually moves sideways or drops further.
3) Extreme Euphoria
Gold and silver were everywhere. People sold other assets just to buy metals.
Crypto investors dumped crypto to move into gold and silver. Exchanges started listing gold and silver products.
All liquidity was focused on one trade.
This level of euphoria usually appears very close to a peak.
4) The price pattern is repeating history.
In silver, similar setups happened in 1980 and again in 2011. After strong rallies, silver saw single-day or two day drops of 20–40%. Those drops created major tops.
After that, recovery took a long time.
Large liquidation events like this do not reverse quickly. Price needs time to stabilize.
This does not mean gold and silver are guaranteed to be finished.
If new geopolitical uncertainty appears, or if policy direction changes again, metals can still rally.
But if no new uncertainty shows up, the more likely scenario is that gold and silver do not make new all time highs for some time.
They may move sideways or stay volatile while the excess speculation clears.
That shift also matters for crypto. When metals stop absorbing all liquidity, capital often starts looking elsewhere. If liquidity conditions stay supportive, Bitcoin and crypto can benefit from that rotation.
But if liquidity starts to weaken, BTC and alts could go even lower.
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