Shining and sparkling - ForkLog: cryptocurrencies, AI, singularity, the future

# It Shines and Shines

What’s happening in the precious metals market

Gold has hit a new record for volatility relative to Bitcoin. The prices of the precious metal plummeted from a record $5,500 per troy ounce to around $4,500 over a few days, then continued to move upward.

Elena Vasileva analyzed what’s happening in the traditional low-risk asset markets and why this should be of interest to crypto investors.

Chronicle: From Records to “Meltdown”

At the end of January, there was a parabolic rise in precious metals prices. After surpassing the $5,000 level at the beginning of the week, gold continued its inertial movement, reaching an all-time high above $5,200 per ounce on January 28. Silver showed an even more explosive dynamic, jumping to $117.69.

However, by Friday, January 30, the market experienced a sharp cooling: gold lost over 4%, dropping to around $5,150, and silver fell by 5% — to $110 (according to CNBC data from 01/30/26). Ed Yardeni from Yardeni Research characterized the situation as a “melt-up” — a phase of euphoric, almost vertical growth without pullbacks, typical of the final stage of a bull market. The sharp correction on Friday was linked by experts to a temporary agreement to prevent a US government shutdown, which triggered profit-taking.

However, the local correction does not change the overall trend: since the beginning of the year, precious metals have demonstrated double-digit growth. Why is this happening?

Gold and silver growth charts in January (as of 01/30/26). Source: Gold Price.## Expert opinion: when politics breaks the economy

The main drama is unfolding in the US, where the executive branch is pressuring the monetary authority (the Fed), demanding lower interest rates amid an investigation against Federal Reserve Chair Jerome Powell.

Additionally, on January 30, President Donald Trump announced the nomination of Kevin Warsh for the next Fed chair. After this, there was another decline in the precious metals market.

Senior lecturer at the Department of Theoretical Economics at HSE Ruslan Khaitkulov explained the essence of the conflict simply in a ForkLog comment:

“Trump is pressuring the Fed to lower rates. This will lead to increased business activity (which is good for him), but also to higher inflation. Controlling inflation is the Fed’s direct task, so they resist.”

When investors see a risk that politicians will “push through” bankers, they understand: the dollar may depreciate. Gold is rising not because more jewelry is being made from it, but because in turbulent times, investors traditionally turn to gold as a safe-haven asset.

Basic knowledge: what are the media buzzing about?

We often hear words like “public debt,” “bonds,” “deficit.” Usually, they sound like white noise, causing anxiety. Let’s translate them into human language to understand why people are rushing into gold:

1. Budget deficit — when the government spends more than it earns from taxes.
2. Public debt and bonds. To cover the gap, the government borrows — issuing bonds (debt certificates). It’s like taking a loan from the bank, but the lender is the whole world.
3. Fed rate. This is the price of money. A high rate — loans are expensive, the economy slows down, inflation drops. A low rate — loans are cheap, the economy accelerates, but prices rise.

What’s happening now? The US has accumulated a lot of debt. Servicing it at high rates (paying interest) is incredibly expensive — it eats up a significant part of the budget.

There are two possible ways to overcome the crisis. The honest one — cut government spending, reduce social programs and military bases, or raise taxes. This option is painful for the economy and highly unpopular among voters. The second way is inflationary, which markets fear most. In this case, authorities might try to pressure the Fed to lower rates, even without economic justification. Then servicing old debts becomes easier, as their real value decreases, but citizens’ savings will also depreciate, and the purchasing power of money will start to fall rapidly.

Gold at $5200 is the market’s bet that the second scenario will be chosen. It’s an indicator of distrust in the government’s ability to pay its bills with honest money.

Historical context: has it all happened before?

The current situation echoes the 1970s. Back then, the US abandoned the “gold standard” (the exchange of dollars for gold), leading to a decade of stagflation — high inflation with weak economic growth.

In 1971, gold was worth $35. By 1980, it soared to $850. There was also a political crisis, an oil shock, and a loss of confidence in the dollar.

The difference today is the added factor of “world fragmentation.”

“The old trading system is not exactly collapsing, but it is ‘fragmenting.’ It started during COVID and continues now due to geopolitics,” — noted Khaitkulov.

Trade wars (threats of tariffs), Washington’s conflict with NATO over Greenland are prompting countries to seek assets that are independent of foreign political will. The dollar is a US asset. Gold is an asset that depends on no one’s political will.

Silver: a double blow

Silver shows leading dynamics. The gold-to-silver ratio (Gold/Silver Ratio) has plummeted from April’s 105 to 50. This indicates a fundamental revaluation of the “white metal.”

🔥This is HISTORIC:

The gold-to-silver ratio plunged to 50, the lowest in 14 YEARS.

This means it now takes just 50 ounces of silver to buy 1 ounce of gold, down from ~105 in April 2025.👇https://t.co/mkPv57Qlvz

— Global Markets Investor (@GlobalMktObserv) January 21, 2026

The market is facing a real shortage. COMEX (London) stockpiles have fallen to their lowest since March last year, losing 114 million ounces. Analysts point out that it’s impossible to quickly replenish warehouses even at high prices due to a lack of processing capacity for scrap.

“The story with silver is similar — it historically moves in tandem with gold as a hedge. But here, the industrial demand factor adds to the pressure,” Khaitkulov added.

Silver is critically important for electronics manufacturing and “green” energy, creating a double pressure on the price: investment demand overlaps with industrial demand for the metal.

While gold simply sits in storage, silver largely goes into the industrial sector, which is difficult to process. The combination of panic investor demand and real industrial hunger creates a spring-like compression effect.

Corporate response and tokenization

High prices are changing the landscape of the mining industry. Chinese giant Zijin Mining announced the acquisition of Canadian Allied Gold for $5.5 billion. Shares of major miners (Newmont, Barrick Gold) are rising as mining margins hit record highs.

Meanwhile, the financial sector is looking for ways to combine gold’s reliability with modern technology. In Hong Kong, the Hang Seng Gold ETF with tokenized shares on the Ethereum blockchain has been launched. This confirms the RWA trend as a way to simplify access to “safe haven” assets for the digital economy.

Goldman Sachs analysts raised their gold forecast to $5400, citing the “stickiness” of hedging positions: large capital remains reluctant to sell the metal even during local pullbacks, fearing long-term macro-political risks.

The collapse of the digital gold narrative?

While physical gold is hitting historic highs, the crypto market is sending alarming signals. January’s rally in precious metals highlighted an unpleasant reality for Bitcoin supporters: in moments of real political fear, capital prefers old-fashioned assets over digital code.

Decoupling and loss of “safe haven” status

Recent events have shattered the myth of Bitcoin as digital gold capable of hedging risks. While the metal’s ounce was rising on news about Greenland and the Fed, Bitcoin dropped below the psychological mark of $80,000, losing 20% from January’s highs.

Nansen and HashKey Group analysts note: the first cryptocurrency is behaving not as a safe asset but as a risky instrument, correlated with tech stocks rather than bullion stored in vaults.

Gold is more profitable in the long run

For the first time in a long while, gold outperformed Bitcoin in five-year returns: the precious metal’s growth was about 185% versus about 164% for the first cryptocurrency.

On January 29, the market valuation of gold increased by $1.5 trillion (comparable to Bitcoin’s entire market cap), while the crypto market fell below $3 trillion, and the fear-and-greed index dropped to 26 (“fear”), whereas gold’s index soared to 99 (“extreme greed”).

The threat of a deep correction

Losing the support level at $80,000 opens the way to a “double bottom” around $74,000. CryptoQuant analysts see signs of investor capitulation, and the RSI metric for the Bitcoin/gold pair has fallen to bear market lows of 2015 and 2018. This could signal either an imminent bottom or a prolonged crypto winter amid a commodities boom.

Investors should recognize that in this cycle, Bitcoin is experiencing an “identity crisis.” The narrative of inflation protection has cracked. The only hope for bulls is a paradigm shift voiced by Changpeng Zhao and BlackRock: betting on Bitcoin not as “second gold,” but as a future global reserve currency that will replace the weakening dollar.

Mirror of reality

The rally in precious metals is not just an opportunity for speculators to profit. It’s a warning signal.

Gold is not rising; money is becoming cheaper. The increase to $5200 indicates that the purchasing power of fiat currencies is rapidly declining. We are witnessing not so much an increase in wealth among metal holders, but an overvaluation of paper money.

The end of the era of calm. Investors no longer believe in the “safe haven” of US government bonds. If the head of state himself attacks his central bank, the concept of a “risk-free asset” disappears.

Technology and archaic assets. Ironically, in the age of AI and blockchain, the world is turning to the oldest asset. However, the market is adapting: tokenized gold ETFs are emerging, combining the reliability of metals with the convenience of cryptocurrencies.