Gold and silver prices fell sharply as investors rushed to sell positions that had pushed metals to historic highs. Losses accelerated on Monday following a heavy sell-off on Friday, marking a sudden reversal in market sentiment.
In Asian trading, spot gold dropped 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 rising geopolitical uncertainty.
Nomination of new Fed chair calms markets
The rally had reflected concerns over geopolitics and uncertainty about US monetary policy. Investors also feared political influence over the Federal Reserve. Those worries eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets reacted positively to the nomination. 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 encouraged widespread profit taking across metals.
Global equities slide as metals retreat
The metals sell-off spilled into equity markets worldwide. Asian stocks 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 fell around three percent. Japan’s Nikkei 225 dropped more than one percent. European markets also opened lower, with the UK’s FTSE 100 down 0.4 percent early in trading.
Mining shares suffered heavy 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 dropped more than five percent. Traders cited steady output from major exporters and easing US-Iran tensions.
The stronger dollar added pressure. Oil trades in dollars, raising costs for non-US buyers. That factor often curbs demand.
Historic rally meets sharp 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 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 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 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.
