Gold Price Forecast - Gold Meltdown: XAU/USD Slams From Record $5,600 Toward $4,700 Support

Gold Price Forecast: XAU/USD After The $5,600 Blow-Off And $3.7T Wipeout

Gold (XAU/USD) Crash Mechanics: From $5,600 Peak To Sub-$4,900 In Hours

Gold’s move into early 2026 was vertical. Spot XAU/USD pushed to record highs near $5,600 per ounce after first clearing the $5,000 psychological barrier and printing around $5,418 on the New York spot market. Within one brutal session, that parabolic leg reversed.
Intraday prints show gold sliding from the $5,600 area to the $4,770–$4,900 zone, with one major low near $4,679.50 and a closing level quoted around $4,893.2, an 8.2% daily loss and roughly 15% peak-to-trough collapse. Different estimates put the notional loss in gold alone near $3.7 trillion, and combined with silver, the move erased between roughly $7 trillion and well over $10 trillion of market value when you include derivatives and related instruments.
A separate snapshot has spot gold near $5,064 after the initial flush, emphasizing that volatility remained extreme even after the first bounce. This was a forced liquidation event in XAU/USD, not a slow macro repricing.

Silver’s 30%+ Meltdown And What It Signals For XAU/USD Liquidity

Silver tracked the move but with far more violence. Prices plunged from about $120 per ounce and dropped by roughly 31%–38% depending on the feed, one of the steepest single-session moves since 1980.
Gold absorbed the larger nominal dollar hit, but silver’s percentage collapse tells you how leveraged the precious-metals complex had become. Thin liquidity, heavy derivatives exposure, and concentrated speculative longs meant that once gold broke, XAG/USD amplified the shock.
This behavior underlines a critical point for XAU/USD: in a heavily leveraged environment, so-called safe havens can trade like high-beta risk assets when the margin calls hit. The safe-haven narrative works over longer horizons; in the short term, liquidity and positioning decide the tape.

Warsh Nomination: Why Fed Politics Crushed Gold Instead Of Supporting It

The catalyst that lined up with the metals crash was Donald Trump’s decision to nominate Kevin Warsh as the next Federal Reserve chair, replacing Jerome Powell when his term expires.
Warsh has a reputation as a hawk, historically favoring tighter policy and higher rates to lean against inflation. Markets had been stuffed with trades positioned for a weaker dollar, lower real yields, and ongoing political risk. When a perceived conservative Fed pick appeared, that structure snapped.
Instead of rushing into gold, traders unwound crowded safe-haven longs. Gold dropped more than 10%, silver over 30%, and related metals like platinum and palladium saw double-digit losses. The nomination served as a release valve for an overextended metals rally, not a starting gun for a new panic bid.

Macro Backdrop: From $2,795 To $5,600 XAU/USD On Politics, War Risk, And Dollar Angst

The violence of the correction only makes sense if you look at the climb. Roughly a year ago, spot XAU/USD sat below $2,795 per ounce. From there, several forces pushed investors into bullion:
Ongoing wars and sanctions, renewed tension around Iran and Venezuela, tariff fights, and even destabilizing rhetoric about territory like Greenland undermined confidence in the existing order.
At the same time, the US dollar index printed a four-month low near 95.50, and investors questioned Fed independence as Trump repeatedly attacked Powell for not cutting rates faster.
That mix of political risk, fiscal stress, and de-dollarization talk pushed gold through $5,000, then toward $5,600, more than doubling from the previous year’s levels. The crash is happening after a massive overshoot, not from a stable base.

XAU/USD Technical Map: Supports, Resistances, And RSI After The Flush

From a pure chart perspective, XAU/USD is still inside a bullish structure that has been in place since 2024, even after this crash.
The recent path:

Gold broke an ascending channel and key resistance around $4,400, triggering an extension of roughly $1,000 per ounce. That move statistically targeted about $5,400, but the market overshot to around $5,600 before collapsing.
The selloff drove price down toward the $4,679.50 low, with subsequent trading clustered between roughly $4,770 and $5,100.
Short-term momentum has flipped negative as spot slipped below its 20-day moving average. The first meaningful structural support sits near the 50-day moving average around $4,650, which is still sloping upward. Below that, the 100-day near $4,300 is the deeper line where long-term buyers are likely to become aggressive.
Analysts have also mapped explicit demand zones beneath spot: high $4,800s–low $4,900s, upper $4,700s, and mid $4,500s, with a scenario level around $4,606 that still fits a corrective structure if tested.
Momentum indicators echo the reset narrative. A 14-period RSI near 33.87 on one widely shared chart shows gold moving from overbought levels above 75 back toward the edge of oversold territory. That is consistent with a sharp but not yet broken uptrend.

Key XAU/USD Line In The Sand: $4,000 As Structural Bull/Bear Divider

The important structural threshold for XAU/USD is the $4,000 area.
As long as gold holds above $4,000, the multi-year bullish pattern that started in 2024 is intact. Price would then be trading in a wide, high-volatility consolidation between roughly $4,400–$5,600, instead of a completed top.
A decisive break below $4,400 opens the door toward $4,000. A clean, high-volume failure below $4,000 would be the level that starts to convert this from a “reset” into a genuine bear leg. That is where the bias would change from buying shakeouts to respecting a deeper unwind of the metals trade.

Gold, The US Dollar, And Fed Repricing After Warsh

The gold drop is tightly linked to a repricing of the US dollar and rate expectations. Before the shock, markets had baked in an aggressive easing path. After the Warsh nomination and hot inflation prints earlier in the week, that view shifted.
The dollar index bounced from the 95.50 low back toward resistance near 97. Strategists now point to 100.50 as a level that, if reclaimed, could fuel a more sustained dollar recovery, adding pressure on XAU/USD and extending the consolidation.
On the other side, a failure of the rebound and a clean break back below 95.50 would revive the bear trend in the dollar and quickly restore the case for gold retesting $5,000 and then the $5,300–$5,500 resistance band once the current correction burns out.

Gold/Silver Ratio: What The 45–64 Whipsaw Says About Metals Leadership

The gold-to-silver ratio adds another layer. Going into the crash, the ratio hit minor support around 45 as silver outperformed. That level has historically acted as a pivot.
After the metals flush, the ratio snapped back toward 64, the previously broken support that now acts as resistance. That bounce tells you the silver capitulation was sharper than gold’s and that the market temporarily shifted back to treating gold as the safer metal within the complex.
A clear break below 45 in the ratio would imply renewed silver leadership and another explosive upside phase in both metals, especially if macro conditions turn risk-off again. A move toward the long-term 30 support in the ratio would likely coincide with a short-term top in silver and an exuberant phase of the next leg higher.

Gold/Platinum Ratio: XAU Still Dominating The Metals Stack

The gold-to-platinum ratio also flashed a signal. When XAU/USD stalled at $5,600, the ratio printed long-term support near 1.80. From there it rebounded above 2.20, which implies that gold is still outperforming platinum and remains the dominant store-of-value trade in the metals space.
The strong reversal candle in January shows that even after platinum and palladium saw heavy losses, capital continues to prefer gold as the primary hedge. This supports the argument that the correction is a reset inside a gold-led bull market, not a turn to a broad commodities bust.

Flows And Big Holders: Central Banks, Tether, And The “Anti-Dollar” Allocation

Beyond charts, positioning in XAU/USD remains underpinned by large buyers. Central banks have been net purchasers of gold, using it as a partial hedge against dollar debasement, sanctions risk, and political volatility.
On the private side, stablecoin and crypto infrastructure players have reportedly become material gold buyers. One of the dominant dollar-pegged stablecoin issuers has been accumulating bullion alongside sovereign entities, reinforcing gold’s role as a reserve asset even in the digital ecosystem.
At the same time, political headlines like a US government shutdown, record $38 trillion US federal debt, and louder debate about dollar supremacy are pushing institutional allocators to treat gold as the core hedge in the “anti-dollar” bucket. Those forces do not vanish because of a single session’s liquidation.

Is Gold Still A Safe Haven After A 15% One-Day Drop?

The synchronized collapse of XAU/USD and XAG/USD while geopolitical risk is rising looks contradictory. In reality, it reflects the mechanics of leverage rather than a loss of gold’s long-term hedge function.
During the rally to $5,600, gold was not just a defensive asset; it became the consensus trade for funds betting against the dollar and buying political risk. When margin calls hit across assets, even the hedge gets sold.
Over months and years, gold still behaves as protection against currency debasement and systemic risk. Over hours and days, it behaves like whatever the most crowded positioning tells it to be. The latest move shows the second effect, not the death of the first.

Gold Price Forecast (XAU/USD): Trading Stance, Levels, And Bias – Buy, Sell, Or Hold?

Short term, XAU/USD is in a high-volatility consolidation zone after an extreme blow-off. With price cycling between roughly $4,700 and $5,100, the path is noisy and driven by positioning, not by slow macro drift.
Key levels:

Upside: $5,000, then $5,300–$5,500, with the former top near $5,600 as the line that would confirm a new leg higher if reclaimed and held.
Downside: $4,650 (50-day moving average), $4,400 (prior breakout line), and $4,000 as the structural pivot between bull correction and real bear phase.

Based on all the data:

For investors already long, this is a Hold as long as XAU/USD trades above the $4,000 zone. The structure is still bullish, and the current move looks like a reset inside a secular trend.
For new capital, the risk-reward favors buying deep weakness into the high $4,400s–mid $4,600s, with clear risk management below $4,000. Chasing strength near $5,000+ after such a crash is less attractive than letting the consolidation mature and entering on controlled pullbacks.
For bearish positions, an aggressive Sell stance only makes sense if gold convincingly breaks and holds below $4,000 with rising dollar strength and evidence that central-bank and institutional demand are fading. That is not the current setup.

Net, the tape signals a bullish but bruised XAU/USD, with a correction that is violent in speed but, so far, still compatible with a long-term uptrend.

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