Gold and silver prices dropped sharply as investors rushed to exit positions that had pushed metals to record levels. Losses accelerated on Monday after a heavy sell-off on Friday, marking a sudden shift in market sentiment.
During Asian trading, spot gold fell more than nine percent to about $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 chair nomination eases market worries
The rally had reflected investor concerns over geopolitics and uncertainty about 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, 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 clearer policy guidance prompted aggressive profit taking across precious metals.
Global stocks slide 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 weaken amid dollar strength
Energy markets also moved lower. Global crude oil prices fell more than five percent. Traders cited stable production from major exporters and easing US-Iran tensions.
The stronger dollar added pressure. Oil trades in dollars, increasing costs for non-US buyers. That effect often curbs demand.
Historic 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 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 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.
