Gold and silver prices have continued their sharp decline following a dramatic reversal from a rally that had pushed both metals to record highs.
In Monday’s Asian trading, spot gold dropped more than 9% to $4,403 (£3,222) an ounce, while silver fell 15% to below $72 an ounce. Prices had reached new highs in January as investors sought “safe haven” assets amid geopolitical uncertainties.
Concerns over the independence of the US Federal Reserve also weighed on the markets, but metals took a sharper hit after President Donald Trump nominated former central bank governor Kevin Warsh as the new Fed chair. The nomination was generally welcomed by financial markets, boosting the dollar by 1% against several major currencies on Friday.
The dollar’s rise coincided with a dramatic sell-off in metals: gold experienced its largest one-day drop since 1983, falling more than 9%, while silver plunged 27%. Deutsche Bank analysts identified Warsh’s nomination as the key trigger for Friday’s losses.
The sell-off continued into Monday, with Asian equities also under pressure. South Korea’s Kospi led the declines, down over 5%, while Hong Kong’s Hang Seng fell 3%, and Japan’s Nikkei 225 slipped more than 1%. Global crude oil prices also fell over 5%, influenced by output decisions from major producers, easing US-Iran tensions, and a stronger dollar making oil more expensive for non-US buyers.
2025 had been a blockbuster year for precious metals. Gold posted its largest annual gain since 1979, peaking above $5,500 at the end of January, while silver reached an all-time high above $120. Market worries, including Trump’s tariffs and concerns over overvalued AI stocks, had repeatedly driven metals to new records.
Looking ahead, Wall Street analysts expect the Federal Reserve to cut interest rates at least twice in 2026, a move that typically increases gold’s appeal. With only about 216,265 tonnes of gold ever mined globally, scarcity remains a key factor in its value.
However, prices can fall as quickly as they rise. Mark Matthews, head of research for Asia at Bank Julius Baer, told Reuters that the recent sharp declines were partly due to metals having “gone parabolic” in previous weeks.
Once profit-taking began, the sell-off “Escalated.