Gold and silver prices plunged sharply as investors rushed to sell positions that had driven metals to historic peaks. Losses intensified on Monday following a heavy sell-off on Friday, signaling a sudden reversal 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 heightened geopolitical uncertainty.
Fed chair nomination eases market anxiety
The rally had reflected concerns over geopolitics and uncertainty about US monetary policy. Investors also feared political pressure on the Federal Reserve. Those worries 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, falling 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 encouraged aggressive profit taking across precious metals.
Global stocks fall as metals retreat
The metals sell-off spread to 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 also opened lower, with the UK’s FTSE 100 down 0.4 percent early in trading.
Mining shares faced steep declines. 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 output 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 factor often curbs demand.
Historic rally meets sudden correction
Precious metals delivered exceptional gains throughout 2025. Gold posted its strongest annual rise since 1979. Markets faced repeated shocks from trade tariffs and concerns over overvalued artificial intelligence stocks.
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 long-term 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 support 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.
