Gold and silver prices plunged sharply as investors rushed to exit positions that had driven metals to historic peaks. Losses accelerated on Monday after a heavy sell-off on Friday, signaling a sudden reversal in market sentiment.
In Asian trading, spot gold fell more than nine percent to around $4,403 per ounce. Silver slid roughly 15 percent to below $72 per ounce. Both metals had surged earlier this year amid heightened geopolitical uncertainty.
Fed nomination eases investor fears
The rally had reflected worries over geopolitics and US monetary policy. Traders also feared 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 drop since 1983, losing 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 aggressive profit taking across metals.
Global stocks slide amid metals retreat
The metals sell-off spilled into equity markets worldwide. Asian equities fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led losses with a decline exceeding five percent.
Hong Kong’s Hang Seng dropped around three percent. Japan’s Nikkei 225 fell more than one percent. European markets opened lower, with the UK’s FTSE 100 down 0.4 percent early in trading.
Mining shares suffered heavy losses. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices follow metals lower
Energy markets also weakened. Global crude oil prices fell more than five percent. Traders cited steady production from major exporters and easing US-Iran tensions.
The stronger dollar added further pressure. Oil trades in dollars, raising costs for non-US buyers. That effect often curbs demand.
Record-breaking rally meets steep 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 drove metals to repeated records. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Profit taking outweighs fundamentals
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 continues to underpin long-term demand. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank purchases fueled 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.
