Gold plunges nearly $500 in widest intraday swing since 2013

07:50

By: Dakir Madiha

Gold plunges nearly $500 in widest intraday swing since 2013

Gold and silver prices plunged from record highs on Thursday in one of the most volatile trading sessions in over a decade. The precious metal saw a staggering swing of nearly $500 per ounce, wiping out roughly $3.4 trillion in market capitalization before a partial recovery. This marked the largest intraday price range since April 2013, with gold fluctuating 9.4 percentage points between its session peak near $5,600 and a low around $5,100, leaving investors stunned after the metal had nearly doubled over the past year.

The sharp sell-off unfolded as a cascade of profit-taking, automated stop-loss orders, and forced liquidations swept through highly leveraged futures markets. Silver endured even steeper losses, dropping 11.9% from over $121 per ounce to $107 before rebounding. Analysts pointed to self-reinforcing volatility as liquidity dried up amid intensifying price swings. Banks and market makers struggled to manage risk, reducing their willingness to quote large volumes and exacerbating the turmoil.

Ole Hansen, head of commodity strategy at Saxo Bank, described the dynamic: volatility feeds on itself as liquidity thins, pushing prices into extreme swings. Simon Biddle, precious metals specialist at Tullet Prebon, echoed this, noting that banks lack infinite balance sheets for such trading and have scaled back risk exposure amid surging volumes.

The downturn coincided with weakness in technology stocks, particularly Microsoft, which shed 10% after quarterly results raised concerns over slowing Azure cloud growth and ballooning AI spending. The tech giant lost $357 billion in market value, its steepest single-day drop on record. This broader market pressure amplified the metals rout.

The volatility erupted a day after the Federal Reserve held interest rates steady at 3.5% to 3.75%, signaling no cuts before June. Markets had anticipated the pause, yet gold surged 5% post-chair Jerome Powell's press conference, hitting $5,602 per ounce amid perceptions of ongoing monetary debasement. Bitcoin also tumbled over 5% to around $84,000 as traders liquidated liquid assets to meet margin calls.

Despite Thursday's chaos, gold remains up nearly 24% for January, on track for its best monthly gain since the 1980s. Silver's performance stands out even more, with over 60% growth this month—its strongest since December 1979. Major indexes ended mixed: the S&P 500 down just 0.1% after dipping 1.5% intraday, and the Nasdaq Composite off 0.7%. Both metals clawed back from lows, with gold above $5,300 and silver near $115. Analysts debate whether the swings signal a healthy deleveraging or deeper market fragility.