Gold and silver prices plunged as investors rushed to lock in profits after a historic rally. Losses accelerated on Monday following a brutal sell-off late last week. The reversal marked a sudden end to months of safe-haven demand.
In Asian trading on Monday, 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 record highs earlier this year.
Markets calm after shift in US monetary leadership
Strong gains earlier in the year reflected geopolitical tension and policy uncertainty. Investors also questioned the independence of the US central bank. Those fears eased after President Donald Trump nominated Kevin Warsh as the next chair.
Financial markets broadly welcomed the move. The US dollar climbed about one percent on Friday against several major currencies. As the dollar strengthened, gold recorded its sharpest one-day fall since 1983, losing more than nine percent. Silver plunged by 27 percent during the same session.
Analysts at Deutsche Bank said the nomination sparked the sell-off. They argued that clearer policy direction triggered aggressive profit taking.
Global stocks and commodities slide together
Selling pressure quickly spread beyond metals. Asian equities fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led losses with a drop exceeding five percent.
Hong Kong’s Hang Seng declined around three percent. Japan’s Nikkei 225 fell by more than one percent. European markets opened lower, with the UK’s FTSE 100 down 0.4 percent early in the session.
Mining shares suffered heavy declines. Fresnillo and Endeavour Mining both dropped by about seven percent as metal prices tumbled.
Oil prices fall as dollar strengthens
Energy markets also retreated. Global crude oil prices fell more than five percent. Traders pointed to stable production levels and easing tensions between the US and Iran.
A stronger dollar added pressure on oil prices. Oil trades in dollars, making purchases more expensive for non-US buyers. That dynamic often reduces demand.
From record highs to rapid reversal
Precious metals delivered exceptional returns during 2025. Gold recorded its biggest annual gain since 1979. Markets remained unsettled by trade tariffs and concerns over inflated artificial intelligence stock valuations.
Those worries 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 drivers
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates usually support gold by reducing yields on competing assets.
Gold’s limited supply underpins long-term demand. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying helped fuel the rally.
However, stretched prices left markets exposed to sharp corrections. Mark Matthews of Bank Julius Baer told Reuters prices had gone parabolic. He said once profit taking started, selling quickly snowballed.
