Gold Crashes Below $5,000 as $1.3 Trillion Wiped Out in 2 Hours

Gold trades at $4,978.06 as of writing, down 2.11% in the last 24 hours after plunging below the $5,000 per ounce mark for the second time this month. Within minutes, the precious metals market erased roughly $1.4 trillion in value, with spot gold sliding toward $4,900 and silver dropping to $76.

The sharp move unfolded in less than 30 minutes, triggering a massive liquidation candle on intraday charts. Market cap losses exceeded $1.2 trillion during the initial wave of selling. Traders described the move as unusually aggressive, raising early speculation of a potential “fat finger” event, where large orders trigger outsized volatility without clear news catalysts. However, fresh geopolitical headlines soon added context.

Geopolitical Shift Eases Risk Premium

Reports emerged that Israeli Prime Minister Benjamin Netanyahu confirmed that U.S. President Donald Trump prefers pursuing a deal with Iran. The statement appeared to reduce elevated geopolitical risk premiums embedded in commodities markets. As tensions eased, traders unwound defensive positions in gold and silver.

Precious metals often attract demand during periods of geopolitical uncertainty. When perceived risks decline, safe-haven flows can reverse quickly. The timing of the diplomatic remarks coincided with the steep drop, intensifying the selloff.

Dollar Strength Pressures Gold

At the same time, macroeconomic data reinforced pressure on bullion. January’s Nonfarm Payrolls report showed the U.S. economy added 130,000 jobs, surpassing expectations of 70,000. The unemployment rate declined to 4.3%, beating forecasts of 4.4%. Jobless claims data released today showed 227,000 claims, slightly above the 222,000 forecast but still consistent with labor market resilience.

Stronger labor conditions reduce the likelihood of near-term Federal Reserve rate cuts. As markets scaled back easing expectations, the U.S. dollar rebounded from oversold levels. A firmer dollar typically weighs on gold by making the metal more expensive for holders of other currencies.

Source: Forex Factory

Markets now await U.S. Consumer Price Index data scheduled for Friday. Economists expect headline and core CPI to rise 2.5% year-over-year, with a 0.3% monthly increase. Inflation data could provide the next directional cue. A softer print might weaken the dollar and stabilize gold. A hotter reading could extend pressure.

China Holiday Adds Liquidity Factor

Seasonal factors also play a role. China, a key driver of spot gold demand, will close markets from February 13 through February 24 for the Lunar New Year holiday. Reduced participation from one of the world’s largest gold consumers may thin liquidity and amplify price swings.

Source: X

Gold has now declined roughly 3% on the session, touching near $4,930 at intraday lows. Silver has fallen even harder, down 10% during the same period. The broader decline reflects coordinated liquidation across the precious metals complex.

Dip Buyers Attempt Rebound

Despite the aggressive drop, buyers have attempted to push gold back above the $5,000 level. Price action shows intraday rebounds as traders test support zones. Whether this level holds remains uncertain.

The rapid unwind highlights how quickly sentiment can shift when macro data, geopolitical developments, and positioning converge. With CPI data looming and liquidity conditions tightening due to the holiday pause, volatility in gold may persist.

For now, the $5,000 threshold stands as both a psychological and technical key resistance. Will buyers regain control, or does the market prepare for another sweep lower? The next catalyst may arrive sooner than expected.