Gold and silver prices fell steeply as investors rushed to exit positions that had pushed metals to historic peaks. Losses accelerated on Monday after a heavy sell-off on Friday, marking a sudden reversal in market sentiment.
During Asian trading, spot gold dropped more than nine percent to around $4,403 per ounce. Silver fell roughly 15 percent to below $72 per ounce. Both metals had surged earlier this year amid rising geopolitical uncertainty.
Central bank nomination eases market fears
The rally had reflected investor concerns over geopolitics and 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 nomination. The US dollar rose about one percent on Friday against several major currencies. As the dollar strengthened, gold suffered 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 greater policy clarity encouraged aggressive profit taking across precious metals.
Global equities fall as 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 dropped around three percent. Japan’s Nikkei 225 fell more than one percent. European markets also opened lower, with the UK’s FTSE 100 down 0.4 percent early in trading.
Mining shares faced heavy declines. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices retreat amid stronger dollar
Energy markets also moved lower. Global crude oil prices fell more than five percent. Traders cited stable output from major exporters and easing tensions between the US and Iran.
The stronger dollar added pressure. Oil trades in dollars, raising costs for non-US buyers. That effect often curbs demand.
Historic rally meets sharp 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 overwhelms fundamentals
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates usually support gold by reducing returns on competing assets.
Gold’s scarcity continues to underpin long-term appeal. 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.
