Mumbai, January 29: The global gold market witnessed an unprecedented reversal on Thursday, January 29, as the gold rate plummeted by 8.7% from its all-time peak. Just hours after hitting a historic high near USD 5,600 per ounce, a massive sell-off wiped out nearly USD 3.4 trillion in market value from total global gold holdings. This dramatic gold crash followed a month of relentless gains, catching many investors off guard as the metal shifted from a record-breaking rally to its sharpest single-day decline in years.

This sudden fall in the gold rate was triggered by a "contagion effect" originating in the US technology sector. As major AI and tech stocks, led by a nearly 12% crash in Microsoft, saw billions in market capitalization vanish, institutional investors were forced into a liquidity scramble. To cover losses and meet margin calls in the collapsing equity markets, many large-scale traders liquidated their winning gold positions, turning the "safe-haven" asset into a source of immediate cash and sparking the broader gold crash. Gold Rate Today, January 29, 2026: Check 22K & 24K Gold Prices in Delhi, Mumbai, Chennai and Other Cities.

Why Did Gold Crash Today?

The primary reason for the sudden fall was not a change in gold’s fundamental value, but rather a crisis of liquidity. Commodities analysts noted that as volatility in G-10 currencies and tech stocks intensified, market makers struggled to manage risk, leading to "thinned" liquidity. When major banks and funds began selling their bullion holdings to rebalance their portfolios, the lack of immediate buyers caused the price to spiral downward rapidly.

Additionally, the gold market had become "overbought" following a 29% surge since the start of the year. Experts suggest that the rapid escalation of geopolitical tensions, including US-Iran friction and trade threats regarding Greenland, had built a "risk premium" into the gold rate that became unsustainable once investors moved to lock in profits during the tech-led market panic. Price of Gold Today: Check What Baba Vanga Predicted About Gold Rate.

Impact on Global Demand and ETFs

The volatility has sent shockwaves through major consumer markets, particularly in India, where the gold rate had recently touched ₹1.7 lakh per 10 grams. The World Gold Council (WGC) noted that while investment demand for gold ETFs has hit record levels, physical jewelry sales have slumped as consumers wait for prices to stabilize.

Despite the crash, trading volumes in major gold ETFs like the GLD have jumped to their highest levels in months. While some retail investors are panicking, institutional "dip buyers" are reportedly viewing the correction as a healthy cooling-off period for a market that had doubled in value over the last twelve months.

Most analysts maintain a bullish long-term outlook for the precious metal despite the current turbulence. JP Morgan Global Research previously anticipated gold to average over USD 5,000 per ounce through 2026, driven by central bank diversification and a weakening US dollar.

The current sell-off is viewed by many as a temporary "technical correction" rather than a structural shift. With the Federal Reserve holding interest rates steady and persistent fears of a global debt crisis, the underlying factors that drove the gold rate to its January peaks remain largely unchanged, suggesting that the "safe-haven" appeal of bullion will likely return once equity market volatility subsides.

TruLY Score by LatestLY
Rating:3

TruLY Score 3 – Believable; Needs Further Research | On a Trust Scale of 0-5 this article has scored 3 on LatestLY, this article appears believable but may need additional verification. It is based on reporting from news websites or verified journalists (BullionVault ), but lacks supporting official confirmation. Readers are advised to treat the information as credible but continue to follow up for updates or confirmations

(The above story first appeared on LatestLY on Jan 29, 2026 10:28 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).