In one of the most dramatic market moves of 2025, gold dropped over $200 and silver tumbled nearly $4 an ounce in just a single trading day. Headlines called it a “historic correction,” and social media lit up with claims of manipulation, panic, and the end of the bullion bull run.
But before anyone sounds the alarm, SD Bullion market analyst James Anderson joined Cole Keller to explain what really happened — and why this may not be the disaster it looks like.
The $200 Gold Drop — What Really Happened
The shock of seeing gold fall over $200 in a day sent ripples through the investment world. On paper, that’s a Four Sigma move — something that statistically “shouldn’t happen.” But as James explained, the gold bullion market is anything but normal right now.
“The volatility is being driven by the mechanics that discover the spot price,” Anderson said. “Those mechanics are mostly derivatives — futures markets, machinations between London, COMEX, and Shanghai.”
While paper contracts changed hands at lightning speed, the physical market told a different story. Even as spot prices fell, SD Bullion and other dealers reported a sharp spike in customer demand. Buyers were lining up to take advantage of the dip.
And despite the pullback, gold remains up over 55% year-to-date — a testament to how strong this bull market has been.
Silver Takes a Hit — But Supply Says Otherwise
Silver’s drop mirrored gold’s — a quick, steep decline that looked disconnected from fundamentals. Silver fell below $50 per ounce, shaking confidence among newer stackers.
But Anderson made it clear: the underlying physical silver shortage is very real.
“We’re literally in a place of verifiable shortage,” he said. “A thousand-ounce bars are in premium right now, and London has real difficulty sourcing them. I’m pretty sure they’re cooked.”
That means the sell-off in paper prices doesn’t reflect what’s happening in the real world. Premiums on large bars are climbing, and supply in key hubs like London, Shanghai, and India is tightening.
In fact, Anderson pointed out that Indian ETF demand may have helped “break” London’s silver market altogether after a 20-million-ounce inflow.
Paper vs. Physical: The Battle Behind the Volatility
So how do paper trades move markets this dramatically while physical buyers see little change on the ground?
The short answer: leverage.
The futures markets — COMEX in New York, LBMA in London, and the Shanghai exchanges — can trade hundreds of ounces of “paper” silver for every real ounce that exists. When large institutions shift positions or liquidate contracts, prices can move fast — even if physical supply hasn’t changed.
“These pullbacks are typical in any bullion bull market,” Anderson said. “It’s not going up in a straight line. The key is to buy on dips — especially drastic ones.”
That’s a pattern seasoned investors recognize: paper traders take profits or cover shorts, prices dip temporarily, and long-term stackers take advantage.
Gold’s Technicals: The 200-Day Reality Check
Even in strong bull markets, pullbacks happen — often around key technical levels. Anderson noted that gold’s price had gapped well above its 200-day moving average, which historically signals overheating.
“When gold trades 30-40% above the 200-day moving average, that’s when you want to ease up on going long,” he explained. “Let it cool down and then reload.”
According to his analysis, short-term support levels sit around $3,700 to $3,900 per ounce — meaning the recent slide could simply be a healthy consolidation within a long-term uptrend.
Silver’s Long-Term Setup: Building Toward Triple Digits
Anderson’s bullish long-term thesis for silver hasn’t changed — if anything, it’s been reinforced by recent events.
He compared today’s price action to past “cup” patterns in silver’s multi-decade history, stretching back to the 1800s. Each cycle of suppression, accumulation, and breakout has led to dramatically higher valuations.
“We’re building the one-two-three step again,” he said. “Triple-digit silver is destiny. Gold has already doubled from $2,000. Silver has to double from here just to match that performance.”
That could mean $100+ silver within the current cycle, followed by a longer “mania phase” in the 2030s when precious metals revalue sharply against fiat currencies.
Lessons from History: Phantom Gold & Real Wealth
Anderson even connected today’s “phantom gold” markets to the 1860s, when U.S. lawmakers investigated paper gold speculation after the Civil War.
“They called it ‘phantom gold’ back then,” he said. “And they were right — paper gold can’t stand the weight of the real stuff.”
The takeaway? Physical bullion wins in the long run.
As governments around the world face record debts and mounting currency risks, gold and silver’s role as real money — not promises — becomes increasingly clear.
For Stackers: Don’t Panic, Prepare
For everyday investors and stackers, the message from this week’s crash is simple: don’t let short-term price swings shake your long-term strategy.
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Buy on dips when the paper market overreacts.
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Focus on physical metal, not digital price charts.
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Stay patient — bull markets reward long-term holders, not day traders.
As Anderson summed up:
“If you’re buying bullion with a long view and holding it securely, you’ll be fine. Just buy on dip. That’s the concept.”
Final Thoughts
The October 2025 sell-off might feel alarming, but zoom out and the story looks very different. Gold and silver remain two of the best-performing assets of the year. Volatility is a feature, not a flaw, of every true bull market.
