Gold and silver prices fell sharply as investors rushed to exit positions that had driven metals to record levels. Losses intensified on Monday following a heavy sell-off on Friday, signaling a sudden shift 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 heightened geopolitical uncertainty.
Fed chair nomination eases market fears
The rally reflected investor concerns over geopolitics and uncertainty about US monetary policy. Traders also feared political influence 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 clearer policy guidance encouraged aggressive profit taking across metals.
Global equities slide amid metals retreat
The metals sell-off spread to stock 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 fell around three percent. Japan’s Nikkei 225 dropped more than one percent. European markets 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 retreat amid dollar strength
Energy markets also weakened. Global crude oil prices dropped more than five percent. Traders cited stable 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.
Record-breaking 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 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 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.
