Gold and silver prices fell sharply as traders rushed to exit positions that had pushed metals to historic highs. Losses accelerated on Monday following a heavy sell-off on Friday, signaling a sudden shift 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 to record levels earlier this year amid global uncertainty.
US central bank nomination eases investor fears
Earlier gains reflected concerns over geopolitics and US monetary policy independence. Investors also worried about political influence over the Federal Reserve. Those fears eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets welcomed the decision. The US dollar rose about one percent on Friday against several major currencies. As the dollar strengthened, gold suffered its steepest one-day drop since 1983, losing 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 triggered widespread profit taking across metals.
Equities fall as commodity weakness spreads
The retreat in metals spilled into 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 fell around three percent. Japan’s Nikkei 225 slipped by more than one percent. European markets also opened lower, with the UK’s FTSE 100 down 0.4 percent early in the session.
Mining shares came under intense pressure. Fresnillo and Endeavour Mining both dropped by about seven percent as metal prices tumbled.
Oil follows metals lower amid steady supply
Energy markets also weakened. 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, which raises costs for non-US buyers. That effect often reduces demand.
Record-breaking gains meet sharp correction
Precious metals delivered exceptional returns throughout 2025. Gold posted its strongest annual gain since 1979. Markets faced repeated shocks from trade tariffs and fears 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 support
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 underpins its long-term appeal. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying fueled 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.
