Gold and silver fell sharply on Thursday, causing unrest in the markets that were already tense due to rising financial stress in the U.S.
Spot gold fell by more than 3%, while silver plummeted by more than 10%. This reversed part of their recent upward movement.
Bad news for gold and silver amid record U.S. debt and rising bankruptcies
At the time of writing, gold is trading at $4,956, a decrease of 3.97%, while silver is trading at $76.74 after a loss of 10.65% in the past 24 hours.
Due to this sudden wave of selling, analysts and investors are wondering whether a broader revaluation of hard assets may be occurring.
The retreat of precious metals occurs amid increasing economic pressure. In the past three weeks, 18 U.S. companies with debts of over $50 million have filed for bankruptcy.
Notably, this is the fastest pace since the pandemic and is nearing levels last seen during the financial crisis of 2009.
Meanwhile, the New York Fed announced in a press release that household debt has reached a record $18.8 trillion. Mortgages, auto loans, credit card debt, and student loans are all at historical highs.
The number of serious credit card delinquencies rose to 12.7% in Q4 2025, the highest percentage since 2011, with younger households particularly under strain.
Such conditions usually arise later in the economic cycle, often preceding policy measures such as interest rate hikes or attempts to increase liquidity.
Bitcoin also remains under pressure, dropping to the $65,000 range as the largest crypto has seen stocks and traditional safe-haven assets left behind in recent months.
Digital assets are often seen as a hedge against macroeconomic uncertainty. However, recent trends show that digital assets have yet to fulfill that role effectively in this cycle.
Analysts divided over metal sell-off: Fed watchers focus on interest rate cuts and asset revaluation.
Analysts disagree and provide various explanations for the decline in precious metals. Some say it indicates short-term volatility within a broader trend of revaluation of hard assets.
“Gold was revalued by the U.S. at $5,000 and the market has caught up with this,” wrote macro analyst Marty Party, suggesting that authorities may use precious metals as a hedge against government debts, alongside digital assets like Bitcoin.
Others warn that tight liquidity conditions prevail and that more weakness could follow if financial stress continues to increase.
Policy watchers are closely monitoring the possible response of the Federal Reserve. Citi economists expect slower job growth in the spring and summer after the jobs report in January disappointed. This could create room for three interest rate cuts in 2026.
Historically, rising bankruptcies of companies and increasing consumer delinquencies precede easing of monetary policy. This means official support may come once economic pressure becomes more visible in the data.
The combination of record household debt, rising bankruptcies, and falling prices of hard assets indicates a market at a critical turning point.
“This economic decay, reflecting the signals of 2008, is no exception. It is a direct result of the current policy based on ideology: prioritizing inflationary spending and social reforms over fundamental economic stability and a competitive market,” responded Jade Kotonono, a well-known user on X.
Is the current crash of precious metals a temporary correction or the beginning of a revaluation that could take several years? Some bullish analysts expect that if gold stabilizes around $5,000, the shift to digital assets could accelerate quickly.
Nevertheless, the current situation presents both opportunities and risks, and investors should conduct thorough research.
As markets process unprecedented financial stress, gold, silver, and Bitcoin may still decline further. On the other hand, a stabilizing policy response could be a catalyst for the next phase of asset repricing.
