Why Gold Is Falling with Silver and Why Ron Paul Predicts a $20K Price
Gold prices
are down about 2.5% today, with silver falling by a similar margin on Monday,
February 2, 2026, although both metals have recently experienced a truly wild
rally.Gold
plunged 11% and silver crashed 36% on Friday, January 31, 2026, the worst day
for precious metals in over a decade, as President Trump's nomination of Kevin
Warsh as Fed Chair triggered a $15 trillion liquidation cascade. JPMorgan
closed $10 billion in silver shorts at the exact market bottom while CME margin
hikes forced panicked selling, raising questions about whether this was a
"natural correction" or a "system rescue operation".In this article, I explain why gold prices are falling
and why Ron Paul’s gold price prediction points to a staggering level of
$20,000 per ounce.Why Gold And Silver Are
Going Down?Historic Crash: $15
Trillion Wiped in Single DayFriday,
January 31, 2026, will go down in precious metals history. Gold tumbled more
than 8% toward $4,900 per ounce before closing at $4,745, down 11% intraday
from Thursday's record $5,608 high. Silver proved even more volatile, crashing
as low as $78.29 before settling with a 31% loss, the steepest single-day
decline since March 1980's Hunt Brothers silver collapse.The carnage
erased approximately $15 trillion from gold and silver markets,
equivalent to half of US GDP. Monday brought continued selling pressure as gold
fell another 4-6% to test $4,400 before recovering to $4,750-4,800 range.The Damage in Numbers:Gold
peak: $5,608 (Thursday, Jan 30)Gold
Friday low: $4,900 (-8 to -11%)Gold Monday low: $4,400 (new multi-week low)Silver
peak: $120-122 (late January)Silver Friday low: $78.29 (-36% intraday, -31%
close)Silver Monday low: $71 (extended selloff)Despite the
brutal correction, gold remains up 6.92% over the past month and
a staggering 68.96% year-over-year, while silver still shows gains
of 8.41% monthly and 163.59% annually.Follow
me on X for more gold and silver market analysis: @ChmielDkKevin Warsh: The Catalyst
That Shook MarketsThe
immediate trigger came Thursday evening when President Trump nominated Kevin
Warsh as the next Federal Reserve Chair, replacing Jerome Powell when
his term ends in May 2026.Warsh, a
former Fed Governor during the 2008 Financial Crisis, is widely viewed as
a monetary hawk who opposed quantitative easing and warned
about inflation risks and market distortions. His nomination sent a clear
signal: tighter monetary policy ahead, reduced balance sheet expansion, and a
stronger commitment to Fed independence from political pressure.Ahmad
Assiri, Research Strategist at Pepperstone, explains: "Metals underwent a
sharp repricing moment on Friday, posting their steepest declines in decades,
while US equities notably refrained from participating in the same panic driven
selloff. This reflects what seems to be a shift in macro sentiment following
Kevin Warsh's appointment as Powell's successor to lead the Federal Reserve,
marking a pivot in policy long term expectations and dollar strength."The Great Liquidation:
JPMorgan's $10 Billion MysteryWhile
mainstream media attributed the crash to Warsh's nomination, Polish
analyst Maksymilian Bączkowski from Comparic.pl presented
explosive evidence of something far more sinister."What
the market is trying to sell today as 'natural reaction to FED' is either
intellectual laziness or conscious disinformation," Bączkowski wrote.
"Silver's drop from $121 to around $78 in a few dozen hours was not a
correction, it was a brutal rescue operation of the system."His
analysis reveals that major investment banks, with JPMorgan leading, had built
massive short positions betting silver's rally was "impossible to
sustain." But the market didn't cooperate. At $121 per ounce,
unrealized losses on these shorts exceeded $10 billion, with JPMorgan alone
accounting for over $5 billion."It
stopped being a matter of 'P&L of one bank', started being real threat
to CME exchange clearing stability and systemic domino effect risk,"
Bączkowski explains. "Banks had to close shorts, but couldn't do it in
normal conditions because buying back contracts would shoot price to cosmos.
They needed one thing: pretext and massive, panicked supply on the other
side."Monday's Recovery: Bullish
Pin Bars EmergeDespite the
carnage, Monday's price action offered hope for precious metals bulls. After
extended morning selling that pushed gold to $4,400 and silver to $71, both
metals staged powerful recoveries.Silver's Dramatic BounceSilver,
which opened Monday testing $71, down nearly 42% from its $122 peak,
recovered sharply to $83 by afternoon, trimming losses to just 2% on the day.
Indian silver ETFs, which had hit 20% lower circuit limits early Monday,
recovered nearly 10% by mid-session.When I said
silver moved too far from its moving averages, I
didn't expect it would return to the 50 EMA in one day, but that's what
happened Friday. Monday's session also initially brought a pullback to
around $71 per ounce, but at time of writing silver is losing only 2% and
changing hands at $83 per ounce, holding above the 50 EMA as well as local
highs from late 2025.Silver
price today. Source: Tradingview.comThe
psychological $80 level proved critical support. If Monday's
session closes near current levels, silver will print a massive bullish
pin bar, a long wick from $71 to $120+ with a small body at $83, a powerful
technical signal suggesting buyers are defending this zone.Gold Finds Support at
$4,800Gold
followed a similar pattern. After falling to $4,400 Monday morning, the lowest
since early January, the yellow metal recovered nearly $400 to trade around
$4,800, down just 2.5%.From my
technical analysis of gold, the situation on the chart closely resembles that
of silver. Prices clearly bounced off the 50 EMA as well as the support zone
marked by highs tested at the turn of last and current year. Another
important support I identify in the zone of the psychological $4,000 level
extending to $3,900 per ounce, the lows from early November combined with
the E200 MA.Technical Outlook: Pin
Bars Signal Reversal?On both
silver and gold, if the day closes at such levels, we will get a huge bullish
pin bar with a very long wick and a small body, which for fans of technical
analysis will be a strong buy signal.Key Technical Levels:Ahmad
Assiri identifies gold's $4,600 as "a highly important key level
in short term price action," while maintaining that "$6,000
level is still a possible target for the year 2026" despite the
correction.Gold Price Prediction:
Gold Heading to $20,000 as "Fiat System Dies"While
short-term traders panicked, former Congressman and Liberty Report host Ron
Paul doubled down on his ultra-bullish long-term thesis.In a
January 27 interview with The David Lin Report, just days before the crash, Paul
warned: "The fiat monetary system is dying" and predicted gold
could reach $20,000 or even $100,000 as the dollar collapses.Paul's
argument focuses on structural monetary system breakdown rather than short-term
Fed policy shifts. His decades-long advocacy for sound money and warnings about
fiat currency debasement suggest the current correction merely represents noise
within a much larger secular bull market for precious metals.This is an
even more extreme forecast than the
one Robert Kiyosaki presented for silver, when he claimed it would rise to
$200 per ounce in 2026.Gold and Silver Price Analysis,
FAQWhy are gold and silver
falling today?Gold fell
11% and silver crashed 36% on January 31, 2026, primarily due to Kevin Warsh's
nomination as Fed Chair, a hawkish policy shift strengthening the dollar and
reversing the "debasement trade." What caused the silver
crash?Silver's
36% single-day crash, worst since March 1980, resulted from Warsh nomination,
CME margin increases, and what analyst Maksymilian Bączkowski calls a
"brutal rescue operation" where JPMorgan closed $10 billion in short
positions (3.17 million ounces) at precisely $78.29, the exact bottom.Will gold and silver
continue falling?Technical
analysis shows bullish pin bars forming with silver recovering from $71 to $83
and gold from $4,400 to $4,800 on Monday, suggesting support is being defended.
Pepperstone's Ahmad Assiri identifies gold $4,600 as critical support with
$6,000 still possible for 2026, while Ron Paul maintains $20,000-$100,000
long-term targets. Is this a good time to buy
gold and silver?Both metals
are testing critical support levels ($80 silver, $4,600-4,800 gold) after
30-40% corrections from peaks, with massive bullish pin bars forming. However,
extreme volatility persists with Monday seeing 20% intraday swings in silver
ETFs.
This article was written by Damian Chmiel at www.financemagnates.com.
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