Gold and silver prices fell steeply as investors abandoned momentum-driven safe-haven trades. Losses intensified on Monday after a heavy sell-off on Friday. The move marked a clear reversal from the record highs seen in January.
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. Investors had pushed both metals to historic peaks earlier this year.
Central bank clarity shifts market mood
Earlier gains reflected geopolitical tension and uncertainty over US monetary policy. Investors also questioned the independence of the US central bank. Those concerns eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets responded positively to the nomination. The US dollar rose by about one percent on Friday against several major currencies. As the dollar strengthened, gold suffered its sharpest one-day fall since 1983, losing more than nine percent. Silver plunged by 27 percent in the same session.
Analysts at Deutsche Bank said the nomination served as the main catalyst. They said greater clarity prompted rapid and widespread profit taking.
Selling spreads across global markets
The sell-off in metals spilled into equity markets worldwide. Asian stocks fell sharply on Monday as investor confidence weakened. South Korea’s Kospi index led regional losses with a drop of more than five percent.
Hong Kong’s Hang Seng declined 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 the session.
Mining shares came under intense pressure. Fresnillo and Endeavour Mining both dropped by about seven percent as metal prices tumbled.
Oil prices fall amid calmer signals
Energy markets also moved lower. Global crude oil prices dropped more than five percent. Traders cited stable production levels and easing tensions between the US and Iran.
The stronger dollar added to the decline. Oil trades in dollars, which raises costs for buyers outside the US. That factor often weighs on demand.
A powerful rally meets reality
Precious metals delivered exceptional gains throughout 2025. Gold recorded its biggest annual rise since 1979. Markets faced repeated shocks from trade tariffs and concerns about inflated artificial intelligence stock valuations.
Those fears pushed metals to repeated records. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Profit taking overwhelms long-term appeal
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates usually support gold by reducing returns on interest-bearing assets.
Gold’s scarcity underpins its long-term appeal. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying supported the rally that began several years ago.
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.
