Gold and Silver Price Crash Explained: Is The Precious Metals Bull Run Over?

Central banks have essentially doubled

their purchasing of gold from 500 tons

per year to over a,000 tons per year.

People have been going crazy for gold

and silver as prices have skyrocketed in

recent months. Some were and indeed some

still are queuing outside shops for

hours to purchase physical gold and

silver. Simply put, the two precious

metals have recently seen their most

explosive moves of all time. Gold ripped

to around $5,600

per troy ounce, then got wiped by 20%

over just three trading sessions.

Silver, meanwhile, smashed into three

figure territory for the first time

ever, and then dropped over 40% before

you could say hi ho. So, not your

typical steady safe haven grind higher,

in other words. Now, these precious

metals have been center stage for

months, specifically because they've

been going ballistic. But after that

recent wipeout, people are beginning to

doubt whether this move has any juice

left. So, here's the question. Is the

fun over, or could go on to smash

through fresh all-time highs? Well, in

this video, we'll look at why precious

metals have gone so crazy, why gold

might have a better chance at new highs

than silver, and how all of this could

play out going forward. My name is Guy,

and you're watching Coin Bureau Finance.

All right, if we want to understand Gold

and Silver's odds of continuing their

parabolic run, we need to understand

what drove the move in the first place.

So, what did drive gold and silver to

break into this record run? Well, for

gold, driver number one is the biggest

structural buyer there is, central

banks. In 2025, central banks bought a

net 863

tons of gold. Now, that was slightly

lower than the 1,000 ton peranom pace of

the previous 3 years, but it was still

way above the 2010 to 2021 average.

Importantly, central bank buying stayed

broad and persistent even with gold

ripping to new highs. But why was that

the case? Well, in large part, it was

due to gold status as a neutral capital.

It's one of the few reserve assets that

isn't somebody else's liability. And in

the current geopolitical climate, that

makes all the more sense. Currently, we

have major Western countries openly

debating how to use immobilized Russian

assets and whether the freeze itself

should become longer term and harder to

reverse. Now, that is a clear signal to

every country watching from the

sidelines. In fact, Russia's central

bank has pointed to the discussion

around repurposing frozen reserves as a

reason emerging market central banks

have been diversifying into gold. In

other words, central banks are buying

because they want reserves that don't

come with political risk. And that leads

us to the second political layer, trade

conflict risk. We're moving towards a

world that questions the US dollar along

with more supply shocks and economic

relationships that are easily

weaponized. So, it's no wonder that

according to a survey from the World

Gold Council, a big majority of central

banks expect gold share of reserves to

rise. But the rally didn't run on just

one engine. Driver number two is best

encapsulated by the so-called debasement

trade. People driven to hard assets like

gold and silver as major currencies lose

their value. When governments are

staring at gigantic debt loads, the

least painful option for them at any

rate is to push policy towards higher

than normal inflation and lower real

rates. That whole policy ecosystem is

basically what people mean by financial

repression. And it's precisely the

environment where in gold and silver

truly shine. And this is why you saw the

big boys turn up. not just short-term

traders, but large allocators who

started viewing precious metals as

something closer to a structural

holding. Much of gold and silver's

uptrend was due to investors starting to

believe they will have a bigger role in

a world where more currency debasement

is unavoidable. And finally, there's

investment demand going mass market. In

2025, gold ETF holdings grew by about

801 tons globally, one of the strongest

years on record. And bar and coin buying

accelerated to a 12-ear high. In China,

investment buying of gold and silver

exploded. And for the first time, demand

for gold as an investment surpassed

jewelry demand. But let's focus now on

silver for a moment. In contrast to

gold, silver is always telling two

stories at once. Silver gets to be a

money metal when people want protection,

but it also gets to be a major

industrial metal when people want

growth. Silver's industrial shortage has

been the centerpiece for its fundamental

bull thesis. 2025 was the fifth straight

year of a silver deficit. According to

the silver institute, that deficit was

around 149 million ounces, which had to

be filled by drawing down above ground

inventories. And importantly, the

industrial demand for silver is still

growing, especially from industries like

solar energy, EV production, and data

centers. So, if we're looking at

fundamental drivers, silver's dual

identity sounds like the best of both

worlds. And for some time it was, at

least when the narrative was in full

euphoric swing. But that euphoric swing

is where people falter. The story can be

very real, but the price action can

still be completely unhinged. And that's

exactly what happened with gold and

silver. Fundamental drivers don't

produce meltups. As bullish as those

factors are, the final stretch into the

recent highs had little to nothing to do

with fundamentals. But how do we know

that? Well, the clearest evidence of

this is the violence of the wipeout in

late January. Gold plummeted 20% over

three trading sessions, while silver

collapsed 40% in the same period. That

doesn't happen when people are investing

and holding for the long term. That's

leverage getting unwound and traders

being forced to account for their poor

risk management. Now, in metals,

exposure usually isn't physical

ownership. It's futures, options, and

leverage products that let traders

control a lot of metal with a small

amount of capital. That's fine so long

as volatility is on your side. But if it

goes against you, then market mechanics

dictate the price. And as volatility

continued ripping traders apart,

exchanges stepped in. Several times over

recent months, the CME has been forced

to raise margin requirements for gold

and silver. That means if you want to

keep the same bet, you've got to post

more cash. If you can't, you cut. And

when most people's directional bias

leans the same way, cutting comes in a

massive wave. The same evidence of

latestage euphoria showed up in Asia.

Chinese exchanges kept tightening rules

and raising margins with dozens of

interventions across metals because once

retail speculation hits a certain speed,

liquidity can't keep up. Silver had it

much worse because it has thinner

liquidity and is more prone to gaps.

When the support bid below current

prices disappears, a small draw down can

snowball into a collapse. And that's

also why the big down days are often

followed by sharp snapbacks. People and

liquidity have left the market, making

it easier to move prices. In other

words, it has nothing to do with the

fundamentals of the real economy

changing overnight. After the late

January wipeout, perhaps the most

notable signal was who stepped in.

Retail investors were eager to buy that

silver dip. They piled in with roughly

$430 million going into the biggest

silver ETF in the six trading days

ending on the 6th of February. When

that's the appetite of the marginal

retail buyer, precious metals, typically

a safe haven asset, can trade like a

riskon asset instead. And that's in part

why commentators and policy makers have

started warning about this explosive

price behavior. Patient money sometimes

steps back when the market gets this

violent. And for a while price gets set

by whoever must sell, not whoever wants

to buy. Selling raises volatility.

Volatility triggers margin hikes. Margin

hikes force more selling. And the loop

can continue until everybody is wiped

out. And in that loop, fundamentals

don't disappear, but they do tend to get

drowned out by emotional traders and

mechanical flows. And by the way, if you

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code. And now back to the video. So

then, what comes after a big spike

higher and drop lower like gold and

silver just had? Well, the long-term

thesis can still make sense, but price

won't magically float back up on logic

alone. After a wipeout, the market has

to rebuild sufficient risk appetite.

Now, the trigger for the crash got

pinned on one headline. Kevin Walsh

being named as the pick to replace

Jerome Powell as chair of the Federal

Reserve. Walsh is widely seen as more

hawkish than many would like and that

was enough to puncture a trade that had

started pricing in heavy currency

debasement as a guarantee. But hawk is

just a label. Walsh has talked up the

idea that an AIdriven productivity boom

could justify rate cuts without stoking

inflation while also pushing for a

smaller Fed balance sheet. That's a bit

of a mixed message and markets don't

handle mixed messages well when

positioning is already crowded. But

there's also a simple political reality.

Lower borrowing costs are popular and

pressure on the Fed to cut has been very

loud and very public. So even if the

markets see Walsh as a hawk, the

incentives around the chair don't

exactly scream that he'll be in favor of

tightening until something breaks. Even

on the balance sheet question, the

signal from the Treasury side has been

not to expect a sudden regime change

because moving too fast risks pushing up

longerterm rates. And that's the

opposite of what politicians want when

they're faced with record debt levels

that need servicing. So the bigger point

isn't that lower rates and financial

repression are canceled. Far from it.

It's more that the debasement trade got

crowded which resulted in a blowoff top

that got yanked back down by a hawkish

scare. And when the trade is heavily

leveraged, price cascades downwards

quickly. So from here, the question

isn't whether gold and silver will see a

structural bid during times of intense

geopolitical uncertainty. They will. The

real question is whether the market can

drum up enough excitement on top of that

to send prices soaring like they have

been over recent months. A lot of the

structural argument, debt loads, blurred

lines between monetary and fiscal

policy, incentives to keep real rates

low is no longer some niche take. It's

the reality the global economy faces.

Gold and silver managed to hit their

recent highs thanks to momentum. So they

would need another bullish impulse to

keep that momentum going. That could be

a temporarily calm market that makes big

allocators comfortable publicly putting

size back on or a renewed shock that

makes the debasement trade feel urgent

again. In any case, after a liquidation

like we had in late January, that

urgency has to be seen in actual flows

and not just in clever arguments. So

that's the immediate term. But for the

medium to long term, there's an

important distinction between gold and

silver when considering how their trends

develop from here. They often get thrown

into the same bucket, but they are not

the same trade or investment.

Gold's main advantage is its status as

hard money. That comes with a built-in

class of marginal buyers in the form of

central banks that don't get margin

called and don't capitulate because a

chart looks ugly. They just rebalance

reserves. And gold's role in official

reserves has deepened globally.

According to IMF statistics, gold's

share in reserves reached 23% in 2025,

over double the levels seen in 2015.

That was boosted by both higher prices

and that steady central bank

accumulation. And that's a big reason

why gold's long-term chart tends to look

more like a consistent uptrend. Even

when it stalls, it has a habit of coming

back with a higher floor and eventually

a higher high because the buyer base

isn't just people who want to get rich.

It includes institutions that want to

stay robust in a world where

geopolitics, debt, and policy

credibility are perpetually changing.

Now, silver on the other hand doesn't

get that luxury. Silver has plenty of

real demand and the fundamentals can

genuinely be tight as we looked at

earlier. But the profile of its marginal

buyers is different. It leans far more

on speculative flows and industrial

usage. And both of those can flip on you

because even the supply demand story,

which currently looks bullish, is a

double-edged sword. If there's a demand

shock, silver's price can take quite a

hit. Currently, there's a strong

argument that markets are priced for

perfection, especially with the AI trade

in full swing. That means though, if

there's one hiccup, projections for

silver demand could get hit hard. So,

one issue with silver as an investment

is that it can be structurally tight and

still trade like a meme stock. And

indeed, the long-term chart tells that

very story. Silver has these violent

historic spikes and then spends ages

going sideways while everyone argues

about manipulation, shortages, and that

this time is different. When silver

stops its uptrend, the following price

action is not pretty. And on that note,

we should point out that silver's

nominal record high from the 1980s

basically stood for decades and only got

decisively taken out in late 2025. And

again, we stress nominal record high

because if you adjust the 1980

high for inflation, it's close to the

$200 mark in today's money. So if you

want to be particularly cynical, you

could argue that silver hasn't done much

since the 1980s peak. Now in contrast,

on an inflationadjusted basis, gold has

cleared its 1980s peak. Estimates put

the 1980 real peak around the mid $3,000

in today's money. and gold

[clears throat]

smashed through that level in late 2025,

going on to reach that $5,600

all-time high this year. So, if you're

trying to decide which metal is better

positioned for possible continuation

upwards, then gold still looks like the

sturdier, more fundamentally anchored

trade. But if gold is hard money, silver

is the high beta cousin, ready to grab

the title of fast money if conditions

line up. So that leaves us with one

simple question. What continuation

signals should we look out for as the

market develops over the coming weeks

and months? First, for gold, there's

that central bank bid. Central banks

signaling around their gold buying

activities will be central to gold's

future trajectory. When the biggest

buyers are still adding to their piles,

like the People's Bank of China

extending its buying streak into

January, that's fundamental demand that

can sustain a big run. Then we have

interest rates and the US dollar. As

mentioned, a big part of the gold and

silver run is the real fear among both

professional and retail investors that

current sovereign debt can only be

managed via higher inflation. So that

means we should focus on real rates and

dollar strength, not the headline

nominal policy rate. Markets keep

translating every personnel headline and

every inflation print into one question.

Are real financial conditions getting

tighter or looser? Okay, but why does

that matter for gold and silver? Well,

when real yields are rising, precious

metals become less attractive to

investors. When real yields are falling

though, metals tend to breathe easier

and can catch a bid even after big

pullbacks. And that brings us to the

leadership transition. Jerome Powell's

term as Fed chair ends on the 15th of

May this year, and Kevin Walsh is set to

take over around that time once

confirmed. Now, we've already seen the

impact Walsh's nomination had, so any

public commentary from him in the coming

weeks will likely move gold and silver.

More specifically on rates, traders are

at the time of shooting leaning towards

at least two quarter point cuts in 2026

with June obviously in focus as Powell

is set to step down in May. So again,

any shift there will ripple across

markets, precious metals included. And

with that backdrop, we also have the

dollar. If the dollar weakens, even when

interest rate differentials say it

shouldn't, that's often a sign a risk

premium is building around policy

uncertainty, and that can be rocket fuel

for gold and silver's insurance bid. The

dollar is also a handy lie detector for

how investors interpret Walsh. It

initially rallied on the assumption he'd

be less tolerant of an allout rapid

cutting spree. Going forward though,

it'll be crucial to watch whether the

dollar stays firm into the handover or

rolls over as markets conclude political

pressure and debt still point towards

lower real rates. Either way, the dollar

usually moves first and precious metals

react vigorously. So, keep your eyes

peeled. And well, that's about all we

have time for today. But what do you

think? Will gold and silver continue

their run, or is that it for another

decade or two? Let us know your thoughts

down in the comments. And if you want to

learn more about the prospect of a

return to the gold standard in the

current era, then you should check out

our video on that right over here.

That's all from me for today, though.

So, as always, thank you for watching

and I'll see you in the next one. This

is Guy signing off.