Gold and silver prices sank as investors rapidly exited safe-haven positions built during months of uncertainty. Losses deepened on Monday following a violent reversal late last week. The drop marked a sharp break from January’s historic rally.
In Asian trading, spot gold fell more than nine percent to around $4,403 per ounce. Silver declined about 15 percent to below $72 per ounce. Both metals had reached record highs earlier this year.
Confidence shift hits precious metals
Strong demand earlier in the year reflected geopolitical tension and policy concerns. Investors also feared political pressure on the US central bank. Those worries eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets welcomed the nomination as a stabilising signal. The US dollar rose roughly one percent on Friday against several currencies. As the dollar strengthened, gold suffered its steepest one-day fall since 1983, dropping more than nine percent. Silver plunged 27 percent during the same session.
Analysts at Deutsche Bank pointed to the nomination as the key trigger. They said improved clarity prompted widespread profit taking.
Broader markets feel the impact
The metals sell-off spread quickly across global markets. Asian equities fell sharply on Monday as risk sentiment weakened. South Korea’s Kospi index led regional losses with a decline of more than five percent.
Hong Kong’s Hang Seng dropped 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 trading.
Mining stocks recorded heavy losses. Shares in Fresnillo and Endeavour Mining both fell by about seven percent as metal prices collapsed.
Oil prices slide alongside metals
Energy markets also moved lower. Global crude oil prices dropped more than five percent. Traders cited steady production plans among major exporters and easing tensions between the US and Iran.
Dollar strength added further pressure. Oil trades in dollars, increasing costs for buyers outside the US. That factor often weighs on demand during periods of dollar appreciation.
A standout year ends with sharp volatility
Precious metals delivered exceptional gains during 2025. Gold posted its strongest annual increase since 1979. Markets faced ongoing concerns over trade tariffs and inflated valuations tied to artificial intelligence stocks.
Those fears pushed metals to repeated record levels. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Profit taking overwhelms long-term support
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates usually support gold by reducing yields on alternative investments.
Gold’s scarcity continues to support its appeal. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying helped fuel the multi-year rally.
However, extreme price moves left markets exposed. Mark Matthews of Bank Julius Baer told Reuters prices had gone parabolic. He said once profit taking began, selling quickly snowballed.
