Gold and silver prices plunged sharply as investors rushed to exit positions that had driven metals to historic peaks. Losses intensified on Monday following a heavy sell-off on Friday, signaling a sudden reversal in market sentiment.
During Asian trading, spot gold fell more than nine percent to roughly $4,403 per ounce. Silver dropped around 15 percent to below $72 per ounce. Both metals had surged earlier this year amid rising geopolitical uncertainty.
Fed chair nomination eases market worries
The rally had reflected fears over geopolitics and uncertainty about US monetary policy. Investors also worried about political pressure on the Federal Reserve. Those concerns eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets reacted positively to the announcement. The US dollar gained about one percent on Friday against several major currencies. As the dollar strengthened, gold posted its steepest one-day decline since 1983, dropping more than nine percent. Silver plunged 27 percent in the same session.
Deutsche Bank analysts said the nomination acted as the main trigger. They noted that greater policy clarity encouraged aggressive profit taking across precious metals.
Equities slide as metals retreat
The metals sell-off spread quickly to global stock markets. Asian equities fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led losses with a decline of more than five percent.
Hong Kong’s Hang Seng dropped 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 trading.
Mining shares took heavy losses. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices fall amid dollar strength
Energy markets also moved lower. Global crude oil prices fell more than five percent. Traders cited steady production from major exporters and easing tensions between the US and Iran.
A stronger dollar added further pressure. Oil trades in dollars, increasing costs for non-US buyers. That effect often reduces demand.
Historic rally meets sudden 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 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 typically support gold by reducing returns on competing assets.
Gold’s scarcity remains a long-term driver. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank purchases helped fuel the multi-year rally.
However, stretched valuations left markets vulnerable. Mark Matthews of Bank Julius Baer told Reuters prices had gone parabolic. He said once profit taking began, selling quickly snowballed.
