Why Gold and Silver Fell Dramatically and How Bitcoin Reacted

Gold and silver deepened their dramatic decline on Monday, extending last Friday’s historic rout that erased trillions in market value. What had been a powerful safe-haven rally quickly flipped into a violent correction, driven by a stronger U.S. dollar, aggressive profit-taking, and rising margin pressures. Analysts say the speed and scale of the move signal that speculative positioning had reached unsustainable levels.

Spot gold dropped around 5% to $4,616.79 per ounce, following nearly 10% losses on Friday when prices crashed below $5,000. Silver fared far worse. After plunging nearly 30% in a single session last week, its worst daily performance since March 1980, the metal extended its fall, briefly sliding more than 12% before stabilizing near $78.30 per ounce.

Trillions Wiped Out in Days

Crypto analyst, Bull Theory, described the move as a historic crash rather than a routine correction. According to the analyst, nearly $10 trillion in combined market value was erased from gold and silver in just three days. Gold alone was estimated to be down roughly 20% from its peak, wiping out about $7.4 trillion in value, around five times the entire market capitalization of Bitcoin.

Silver’s collapse was even more extreme. Analyst noted that the metal has fallen close to 40% from its highs, erasing roughly $2.7 trillion in market value, a figure comparable to the entire crypto market. The analyst warned that so-called safe-haven assets are now trading with volatility levels more commonly associated with crypto memecoins, highlighting how crowded and leveraged these trades had become.

What triggered the sell-off?

A key driver of the sell-off has been renewed strength in the U.S. dollar. The dollar index has gained around 0.8% since Thursday, making dollar-denominated gold and silver more expensive for overseas buyers. At the same time, expectations for tighter monetary policy have increased the opportunity cost of holding non-yielding assets like gold.

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Markets were caught off guard after President Donald Trump nominated former Federal Reserve Governor Kevin Warsh to succeed Jerome Powell as Fed chair when his term ends in May. Warsh is known for favoring tighter monetary policy, a shift that has boosted the dollar and dampened enthusiasm for rate-sensitive assets.

CME Margin Hikes Add Pressure

The CME Group moved quickly in response to last week’s volatility, announcing higher margin requirements effective after Monday’s market close. Margins on COMEX gold futures were raised from 6% to 8%, while margins on COMEX 5,000-ounce silver futures jumped from 11% to 15%.

Experts Watch the Crypto Link

Crypto analyst Michaël van de Poppe focused on silver’s extended correction, noting that the metal was down more than 40% in just two days. He described the move as a “massive bloodbath” and pointed out that Bitcoin had already felt the impact over the weekend, though it had begun to stabilize as commodities took the brunt of the selling.

Van de Poppe emphasized a recurring market pattern: when commodities fall sharply, crypto often follows. However, he also noted that once commodities find a bottom, digital assets have historically outperformed.

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