Gold and silver prices fell sharply as investors rushed to exit trades that had pushed metals to record highs. Losses accelerated on Monday following a heavy sell-off on Friday, marking a sudden shift in market sentiment.
In Asian trading, spot gold dropped more than nine percent to about $4,403 per ounce. Silver slid roughly 15 percent to below $72 per ounce. Earlier this year, both metals had surged amid geopolitical uncertainty.
Markets calm after US central bank nomination
Earlier gains reflected tension over geopolitics and uncertainty about US monetary policy. Investors also feared political pressure on the Federal Reserve. Those concerns eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets responded 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 clearer policy guidance prompted rapid profit taking across metals.
Global equities slide alongside metals
The metals sell-off quickly spread to equity markets. Asian stocks fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led losses with a drop exceeding five percent.
Hong Kong’s Hang Seng declined around three percent. Japan’s Nikkei 225 fell by more than one percent. European markets also opened lower, with the UK’s FTSE 100 down 0.4 percent early in the session.
Mining shares faced steep declines. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices weaken amid dollar strength
Energy markets also moved lower. Global crude oil prices dropped more than five percent. Traders cited steady production from major exporters and easing US-Iran tensions.
The stronger dollar added pressure. Oil trades in dollars, raising costs for non-US buyers. That effect often curbs demand during periods of currency strength.
Historic rally meets sudden correction
Precious metals delivered exceptional gains throughout 2025. Gold posted its largest annual rise since 1979. Markets faced repeated shocks from trade tariffs and concerns over inflated artificial intelligence stock valuations.
Those fears drove metals to repeated records. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Profit taking overtakes long-term drivers
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 attraction. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying fueled the multi-year rally.
However, stretched valuations left markets vulnerable. Mark Matthews of Bank Julius Baer told Reuters prices had gone parabolic. He said once profit taking began, selling quickly snowballed.
