Gold and silver prices fell sharply as investors rushed to sell positions that had driven metals to historic peaks. Losses deepened on Monday after a heavy sell-off on Friday, signaling a sudden reversal in market sentiment.
During Asian trading, spot gold dropped more than nine percent to about $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 anxiety
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 posted 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 sparked the sell-off. They noted that clearer policy guidance prompted widespread profit taking across metals.
Global stocks slide as metals retreat
The metals sell-off spilled into equity 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 also opened lower, with the UK’s FTSE 100 down 0.4 percent early in trading.
Mining shares suffered heavy losses. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices fall amid stronger dollar
Energy markets also moved lower. 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 further pressure. Oil trades in dollars, increasing costs for non-US buyers. That factor often reduces demand.
Historic rally meets sudden 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 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 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.
