Gold futures plunged sharply on Jan. 30, 2026, sliding below $4,800 per troy ounce as prices pulled back from the powerful rally seen in recent times. Spot gold logged its steepest one-day drop since the early 1980s, while Mar '26 silver futures collapsed more than 13% on the day. iShares Silver Trust SLV plunged 24.1% last week while SPDR Gold Trust GLD retreated 4.7%.
“Warsh Hawkish” Trade Led to Selling Pressure?
The sell-off joined the broader market decline, after President Trump named Kevin Warsh as the next Chair of the Federal Reserve, as quoted on Yahoo Finance. Markets interpreted the nomination as easing concerns over the Fed’s independence, given Warsh’s historically hawkish policy stance.
After the superb metals rally in recent times, a correction was inevitable anyway. JPMorgan analysts recently noted that silver prices have already moved well beyond their projected averages. JPMorgan analysts recently noted that silver prices have already moved well beyond their projected averages, as mentioned on Yahoo Finance.
Buy the Dip in Gold or Step Aside?
Despite the sharp decline, bullish long-term projections prevail. Just last week, Goldman Sachs lifted its year-end gold price target to $5,400, citing potential upside from stronger participation by private-sector investors, as quoted on the above-mentioned Yahoo Finance article.
Is the Dollar a Crucial Factor Now?
A weakening dollar has been a plus for gold investing or broad-based commodity trade. The U.S. dollar recently sank to a four-year low as the yen strengthened on intervention talks.
U.S. policy uncertainty and the partial government shutdown, as well as the emerging trend of de-dollarization have been weighing on the greenback. Since commodities are priced in the greenback, a decline in the U.S. dollar is positive for gold prices (read: Dollar Slides to Near Four-Year Low: ETF Strategies to Play).
In a Friday morning note, Evercore ISI vice chairman Krishna Guha said markets were “trading Warsh hawkish,” noting that the Fed chair pick could help stabilize the dollar — though not fully erase the downside risks, as quoted on CNBC. No wonder, Invesco DB US Dollar Index Bullish Fund UUP added 1% on Jan. 30, 2026.
However, viewing Warsh as too hawkish may catch traders on the wrong foot, as a sudden reversal is possible. Guha from Evercore ISI emphasized that Warsh should be viewed as a pragmatist rather than an ideological hawk, the CNBC article mentioned.
Gold Outlook for 2026: Limited Upside?
We expect limited upside for gold this year, as the metal’s strong 2025 rally was largely driven by heightened geopolitical tensions — risks that have eased considerably and that investors have also largely adjusted to now. Pronounced U.S. dollar weakness, a tailwind in 2025 could also fade soon. Note that the dollar bull ETF UUP has lost about 9% over the past year (as of Jan. 30, 2026) but was up 0.2% last week.
Meanwhile, solid central bank buying that has fueled gold’s recent ascent has slowed in recent months, reducing a key source of easy upside, according to Toni Meadows, head of investment at BRI Wealth Management, as quoted on CNBC.
However, the strategic case for de-dollarization remains intact. This is especially true given that Trump’s trade policies and foreign-policy interventions may make countries wary of holding U.S. assets.
As a result, another phase of a smooth, rapid climb in gold prices in 2026 looks unlikely. Silver is likely to face a similar fate, though silver’s industrial connection to the AI sector can offer the metal occasional support.
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SPDR Gold Shares (GLD): ETF Research Reports Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports iShares Silver Trust (SLV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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