Gold plunged more than 5% on a single day, its biggest decline in two months. Additionally, there was widespread selling in precious metals on December 29th, with silver, platinum, and palladium also falling.
Prices have recovered today, but analysts are divided. Some expect this momentum to continue, while others warn of changes that could benefit crypto assets.
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On December 29th, the precious metals market suffered a significant decline. Gold fell more than 5%, its biggest single-day decline since late October 2025.
Silver briefly soared to an all-time high of around $84, before rebounding sharply and closing at around $70.5. This corresponds to a decline of 16%. Palladium suffered a similar decline.
Finally, platinum also fell over 15%. These drawdowns come amid an explosive rally that has seen precious metals prices reach new highs this month.
“As we said last night, the rally is getting out of hand. We expect volatility to rise further,” Kobisi Letter posted.
While precious metals fell, the cryptocurrency market showed signs of recovery, with Bitcoin briefly reaching the $90,000 level and Ethereum rising to $3,000. The move has some analysts speculating that capital rotation has begun.
“Silver has fallen 11% in the past few hours as cryptocurrencies have started to soar. Money is circulating from silver and gold into Bitcoin and the broader crypto market,” Crypto Rover commented.
However, it turned out that the metal recoil did not last long. Precious metals are trading in the green again today, with gold up nearly 1% in the past 24 hours. Silver soared 3% and platinum rose 2.6%, while palladium continued to decline modestly.
As metals recovered, the crypto market moved in the opposite direction. Market capitalization has fallen 0.13% in the past 24 hours, with mixed signals reinforcing and analysts divided on the market’s next move.
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Gold’s streak supports the bullish case
Many analysts argue that the recent decline in precious metals prices does not indicate a fundamental shift in demand. There remains hope that the bull market could continue into next year.
“This kind of simultaneous decline usually indicates an unwinding in a crowded trade rather than a sudden change in underlying metal demand,” said a professional investor.
Additionally, Kobeissi Letter highlighted that gold has currently been trading above its 200-day moving average for approximately 550 trading days. This was the second longest streak on record.
The only longer period was after the 2008 financial crisis, when gold remained above that level for about 750 business days. During the current upswing, gold prices have increased by 135%, outpacing the 91% increase recorded between 2009 and 2011.
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By comparison, the 1986-1988 cycle rose 38% in about 510 sessions, while the 1978-1980 period saw gold rise 209% in about 495 sessions.
“Gold momentum remains historically strong.” Post added.
Examples of capital turnover
However, one market watcher noted that sharp corrections in gold often weigh on sentiment and could cause capital rotation.
“While some are expecting a rebound, these divergences signal a deeper shift in market focus, which could benefit other assets like BTC,” Professor Crypto said.
From a technical perspective, analyst Michael van de Poppe noted that multiple bearish divergences have surfaced in different time frames, highlighting the decline in momentum despite recent new highs. He explained:
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“Gold has corrected significantly… The talk of the meeting is not about extending the correction, but the fact that gold has fallen below its previous ATH is not great. This is probably the stage where many believe there is another rally on the horizon, but the same group will blame Bitcoin for not going up. It is the stage where it turns.”
In another post, Van de Poppe observed a bullish divergence on the daily BTC/Gold chart, suggesting that Bitcoin is likely to outperform gold in the coming period.
“Similar periods with such bullish divergences: Q3 2024 (just before Bitcoin broke towards the $100,000 barrier), Q4 2022 (end of Bitcoin bear market). A major rotation is on the horizon,” he added.
Volatility in precious metals and cryptocurrencies therefore highlights increased market volatility and increased uncertainty around capital flows. While gold’s long-term trend remains historically strong, technical signals and relative performance suggest that investors are increasingly focusing on alternative assets.
Whether recent movements indicate a temporary divergence or the early stages of a broader rotation remains an open question.
