Precious metals just experienced a crash that looked more like a crypto liquidation than a safe-haven unwind.
Gold and silver posted their worst losses in decades on Friday, with silver at one point plunging more than 30% intraday before trimming some of the damage. Gold’s decline was smaller in percentage terms, but still stunning. The metal briefly fell more than 10% in a single session, marking its sharpest intraday drop since the 1980s and a steeper fall than during the 2008 financial crisis.
Parabolic up. Elevator down.
The brutal reversal comes after a massive run-up fueled by a mix of retail trader enthusiasm and classic macro fears. Investors had piled into precious metals on concerns about geopolitical tensions, trade wars, and a weakening dollar, while also chasing momentum as prices went nearly vertical.
Silver in particular had become a favorite for speculative traders. That made it especially vulnerable once the tide turned, as crowded positions started to unwind all at once.
Leverage made it louder
One major accelerant behind the size of the move appears to be leveraged exchange-traded funds tied to metals futures. Products offering double exposure to daily silver moves had grown increasingly popular during the rally, which works great on the way up and painfully on the way down.
As silver futures tumbled, those leveraged ETFs were forced to rebalance by selling even more futures near the close. That mechanical selling likely intensified the drop and helped create the sharp volume spike seen right around settlement time.
Safe haven, meet forced selling
Gold and silver are traditionally seen as shelters during market stress, but Friday’s action showed how positioning and leverage can overwhelm that narrative in the short term. When trades get crowded and financed with leverage, even “safe” assets can behave like risk assets during a squeeze.
For now, the metals market just delivered a reminder that parabolic rallies rarely end quietly.