Gold and silver prices plunged sharply as investors exited positions that had driven metals to record highs. Losses intensified on Monday after a heavy sell-off on Friday, signaling a sudden shift in market sentiment.
During Asian trading, spot gold fell more than nine percent to around $4,403 per ounce. Silver dropped roughly 15 percent to below $72 per ounce. Both metals had surged earlier this year amid rising geopolitical uncertainty.
US central bank clarity sparks sell-off
The rally had reflected fears over geopolitics and uncertainty about US monetary policy. Investors also worried about political pressure on the Federal Reserve. Those concerns eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets reacted positively to the announcement. The US dollar rose about one percent on Friday against several major currencies. As the dollar strengthened, gold suffered its steepest one-day fall since 1983, dropping more than nine percent. Silver plunged 27 percent in the same session.
Analysts at Deutsche Bank said the nomination triggered the sell-off. They noted that improved policy clarity prompted aggressive profit taking across precious metals.
Global stocks slide as metals retreat
The metals sell-off spread to equity markets worldwide. Asian stocks fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led regional losses with a decline exceeding five percent.
Hong Kong’s Hang Seng fell around three percent. Japan’s Nikkei 225 dropped by more than one percent. European markets also opened lower, with the UK’s FTSE 100 down 0.4 percent early in trading.
Mining shares faced heavy declines. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices fall amid steady output and stronger dollar
Energy markets also weakened. Global crude oil prices fell more than five percent. Traders cited steady production from major exporters and easing tensions between the US and Iran.
The stronger dollar added further pressure. Oil trades in dollars, which raises costs for non-US buyers. That effect often curbs demand.
Historic rally faces sharp correction
Precious metals delivered exceptional gains throughout 2025. Gold recorded its strongest annual rise since 1979. Markets faced repeated shocks from trade tariffs and concerns over inflated artificial intelligence stock valuations.
Those worries pushed metals to repeated records. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Profit taking outweighs long-term support
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates usually support gold by reducing returns on alternative assets.
Gold’s scarcity remains a key factor in long-term demand. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank purchases helped fuel the multi-year rally.
However, stretched valuations left markets exposed. Mark Matthews of Bank Julius Baer told Reuters prices had gone parabolic. He said once profit taking began, selling quickly snowballed.
