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    Gold and silver prices crater: risk and planning takeaways for mine projects

    January 31, 2026|

    Reviewed by Joe Ashwell

    Gold and silver prices crater: risk and planning takeaways for mine projects

    First reported on MINING.com

    30 Second Briefing

    Gold and silver prices crashed on Friday, with spot gold plunging over 12% intraday before closing around $4,910/oz (down more than 8%) and silver dropping as much as 33% to $75/oz before settling at $85/oz, still 29% lower. The sell-off followed reports that the Trump administration will nominate noted hawk Kevin Warsh as Federal Reserve chair, compounding pressure from a hotter‑than‑expected US producer price print and extreme positioning, including record call‑option buying. Despite the rout, gold remains up over 10% and silver more than 20% year‑to‑date, after peaks near $5,600/oz and $121/oz earlier this week.

    Technical Brief

    • A “record wave” of call-option buying, per Goldman Sachs, mechanically amplified upside momentum before the reversal.
    • Analysts at Commerzbank AG interpret the magnitude of the drop as evidence of large-scale profit‑taking after parabolic gains.
    • Strategists at Oversea-Chinese Banking Corp. characterise current price action as “fast‑up, fast‑down”, warning of momentum‑driven reversals.

    Our Take

    With silver still up more than 20% year-to-date despite a 29% daily drop, high-cost primary silver mines in the USA and Mexico are likely to remain viable in most project models already in our database, but developers may now face tougher stress-testing on downside price cases.

    Gold’s recent relative-strength index near 90 signals an extreme momentum phase; in our coverage this has often preceded short, sharp corrections that have delayed financing decisions for marginal gold projects rather than cancelling them outright.

    The violent intraday moves in gold and silver will feed directly into discount-rate and hedge-strategy assumptions for new gold projects such as McEwen Inc.’s expanded Gold Bar complex, which in our database already sits in a cohort of projects where lenders are pushing for more structured price protection.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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