Gold Price Crash January 2026: What Happened & What UK Sellers Should Do Now
On 31 January 2026, gold suffered its worst single-day crash since the 1980s — falling 11% from a record high of $5,595. Here is exactly what happened, why prices are already recovering, and what it means for anyone in the UK who owns gold.
Quick Answer: Should You Sell Your Gold Now?
Yes, if you have unwanted jewellery or scrap gold. Even after the crash, gold is currently around £116.78/gram for 24ct — still historically extraordinary. Scrap dealers report 1-3 day processing delays from high demand. If you are holding gold as a long-term investment, the structural bull case (central bank buying, de-dollarisation) remains intact. Major UK banks forecast gold at £3,700-£4,200 per troy ounce over the next 12 months.
Live 24ct Gold Price
£116.78 per gram
Per Troy Ounce
£3632.41
vs All-Time High (£3,924)
-7.4%
What Actually Happened: A Timeline
January 2026 was the most dramatic month for gold in over 40 years. The metal set new all-time highs almost daily before suffering a historic single-day collapse. Here is the timeline:
Gold begins the year strongly, buoyed by continued central bank buying and geopolitical tensions. The US-China tariff situation remains unresolved.
Tether announces major gold reserve purchases. Trading volumes surge to $623 billion per day, 72% above the 2025 average. Momentum traders pile in.
Gold hits a new record, up 29.5% in a single month. Euphoria grips the market. Some analysts call for $6,000. Retail buying surges across the UK.
Trump nominates Kevin Warsh as Fed Chair. The dollar surges. CME raises margin requirements from 6% to 8%. Forced liquidation cascades through futures markets. Gold's worst single day since the 1980s.
Silver suffers even worse, falling 36% in a single session. Reports emerge that JPMorgan closed $10 billion in silver shorts near the exact market bottom.
Institutional investors buy the dip aggressively. GLD sees $2.6 billion in monthly inflows. All regions except Europe report net ETF inflows. Scrap gold dealers report 1-3 day processing delays from surging sell orders.
The “Warsh Shock” Explained
Kevin Warsh is a former Federal Reserve governor (2006-2011) who is widely regarded as a monetary hawk. He publicly opposed the Fed's quantitative easing programmes and has advocated for tighter monetary policy.
His nomination to replace Jerome Powell as Fed Chair (effective May 2026) signals a potential shift towards higher interest rates and a stronger US dollar — both traditionally negative for gold.
Three factors combined to create the perfect storm:
- Dollar surge: A hawkish Fed means higher rates, which strengthens the dollar and makes gold more expensive for non-US buyers.
- Margin call cascade: The CME raised gold futures margin requirements from 6% to 8%, forcing leveraged traders to sell immediately.
- Overcrowded trade: After a 29.5% January rally, speculative long positions were at extreme levels. When the sell-off began, everyone rushed for the exit simultaneously.
The Numbers Behind the Crash
-11%
Gold single-day fall
-36%
Silver single-day fall
6% → 8%
CME margin requirement increase
Why Gold Is Already Recovering
Despite the severity of the crash, gold recovered rapidly in the first week of February. Here is why:
Institutional Buying
Major institutional investors treated the crash as a buying opportunity. GLD (the world's largest gold ETF) saw $2.6 billion in net inflows during January — a record, according to World Gold Council ETF data. All regions except Europe reported net ETF inflows on 30 January and 2 February.
Central Bank Demand Unchanged
The structural buyers — central banks accumulating over 1,045 tonnes in 2024 alone (WGC Gold Demand Trends) — did not change their strategy. Their buying is driven by de-dollarisation, not short-term Fed policy. This creates a persistent floor under prices.
US Debt & Tariff Risk Unchanged
US federal debt stands at $36.2 trillion (124% of GDP), with $9.2 trillion maturing in 2025 alone. The Trump administration's tariff programme — 25% on Canada/Mexico, 10% on China — remains in force, sustaining the trade-war uncertainty that drove gold to $5,595 in the first place. These fiscal and geopolitical drivers were not altered by a single Fed appointment.
Physical Demand Surge
UK scrap gold dealers reported 1-3 day processing delays as sellers rushed to lock in prices. The WGC January 2026 market commentary noted gold trading volumes averaged $623 billion per day in January — 72% above the 2025 average — reflecting intense activity from both sellers and bargain-hunting buyers.
What the Banks Are Saying: 12-Month Forecasts
Despite the crash, major banks have maintained or only slightly reduced their gold price targets. Here are the latest forecasts as of February 2026:
| Bank | 12-Month Target (USD) | Approx. GBP/oz | Stance |
|---|---|---|---|
| Barclays | $4,800 - $5,200 | £3,700 - £4,000 | Bullish |
| HSBC | $4,600 - $5,000 | £3,500 - £3,850 | Moderately Bullish |
| Standard Chartered | $5,000 - $5,500 | £3,850 - £4,200 | Very Bullish |
| Goldman Sachs | $4,500 - $5,000 | £3,460 - £3,850 | Bullish |
Note: Forecasts are not guarantees. Past performance does not predict future results. Analysts can be wrong.
What Should UK Gold Owners Do Now?
The answer depends entirely on your situation. Here is our practical guidance:
Even after the 11% crash, gold at ~£115/gram (24ct) is far above any price seen before 2025. If you have broken chains, unworn rings, or inherited pieces you do not want, now is still an excellent time to sell. Dealers are processing high volumes, so expect 1-3 day waits.
Central bank buying at 1,000+ tonnes per year, BRICS de-dollarisation, and geopolitical uncertainty all continue. The Warsh appointment is a headwind but unlikely to reverse a multi-year structural trend. Major banks maintain bullish 12-month targets.
Gold is currently ~10% below its all-time high. For those wanting exposure, buying in stages (pound-cost averaging) reduces the risk of timing the market. Gold Sovereigns and Britannias remain CGT-free for UK buyers.
The CME margin increase means positions require more capital. Volatility indicators are at multi-year highs. The Warsh confirmation process will create ongoing uncertainty. This is not a market for the faint-hearted.
Current UK Scrap Gold Prices (Post-Crash)
Even after the 11% crash, today's scrap gold prices remain well above anything seen before 2025. Here are current rates per gram:
9ct Gold
£43.79
per gram
14ct Gold
£68.32
per gram
18ct Gold
£87.59
per gram
22ct Gold
£106.97
per gram
Historical Context: How Does This Crash Compare?
Gold crashes are rare but not unprecedented. Here is how the January 2026 crash compares to previous major corrections:
| Event | Date | Drop | Recovery Time |
|---|---|---|---|
| Warsh Shock | 31 Jan 2026 | -11% (1 day) | ~1 week (partial) |
| COVID Liquidity Crisis | Mar 2020 | -12% (2 weeks) | ~4 months |
| 2013 Flash Crash | Apr 2013 | -13% (2 days) | ~7 years |
| Volcker Rate Shock | 1980-1981 | -65% (2 years) | ~28 years |
Key Insight
Not all crashes are equal. The 2013 crash took 7 years to recover because it was driven by genuine fundamental change (tapering of QE). The 2020 crash recovered in months because the fundamentals remained strong. The 2026 crash appears more like 2020 — a liquidity event within an ongoing structural bull market — rather than a fundamental shift like 2013 or 1980.
Frequently Asked Questions
Gold crashed 11% on 31 January 2026 after Donald Trump nominated Kevin Warsh as the next Federal Reserve Chair. Warsh is a well-known monetary hawk who opposed quantitative easing. The US dollar surged, and the CME raised gold margin requirements from 6% to 8%, triggering a forced liquidation cascade across futures markets.
Gold reached an all-time high of $5,595 per troy ounce (approximately £3,924) on 28 January 2026. This represented a 29.5% gain for the month of January alone, driven by geopolitical risk, central bank buying, and US tariff uncertainty.
Even after the crash, gold prices remain historically extraordinary at around £115 per gram for 24ct gold. If you have unwanted jewellery or scrap gold, prices are still near all-time highs. If you are holding gold as an investment, the long-term structural drivers (central bank buying, de-dollarisation) remain intact. Major UK banks forecast gold at £3,700-£4,100 per troy ounce over the next 12 months.
Yes, gold recovered significantly within the first week of February 2026, bouncing from $4,745 back to approximately $4,870-$4,950. Global gold ETFs saw net inflows even during the crash, with institutional investors buying the dip aggressively. GLD recorded $2.6 billion in single-month net inflows.
The structural drivers behind gold's rise remain intact: central banks bought 1,000+ tonnes annually for three consecutive years, BRICS nations are diversifying away from the dollar, and geopolitical uncertainty continues. Major banks including Barclays, HSBC, and Standard Chartered maintain bullish 12-month targets. However, the Warsh nomination introduces a new headwind through potentially tighter US monetary policy.
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Sources
- CNBC — Gold surges past $5,100 to new record (26 Jan 2026)
- CNBC — Silver plunges 30% in worst day since 1980 (31 Jan 2026)
- Fortune — Kevin Warsh Fed nomination market reaction (31 Jan 2026)
- BullionVault — Gold sinks 21% from record high (Feb 2026)
- World Gold Council — Gold ETF Holdings and Flows (Feb 2026)
- World Gold Council — Gold Market Commentary (Jan 2026)
- Marex — January 2026 metals madness: records before sell-off
Founder & Market Researcher
Taro has been actively investing in precious metals and financial markets for over 15 years. Frustrated by the lack of transparent, accurate gold pricing information in the UK, he built London Gold Exchange as a data-driven resource for fellow investors. The site combines real-time market data, verified dealer information from 242+ UK businesses, and insights drawn from years of hands-on experience in the gold market.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Gold prices are volatile and past performance does not guarantee future results. Always conduct your own research and consider consulting a qualified financial advisor before making investment decisions. London Gold Exchange is an information service and does not buy, sell, or hold gold on behalf of users.