Gold and silver prices slumped as investors rapidly abandoned once-favoured safe-haven trades. Losses deepened on Monday after a violent sell-off late last week. The reversal marked a sudden shift in global market sentiment.
During Asian trading on Monday, spot gold fell more than nine percent to about $4,403 per ounce. Silver dropped roughly 15 percent to below $72 per ounce. Investors had driven both metals to record highs earlier in the year.
Policy relief drains demand for safe havens
Earlier gains reflected intense concern over geopolitics and monetary policy. Investors also worried about political pressure on the US central bank. Those fears eased after President Donald Trump nominated Kevin Warsh as the next chair.
Markets reacted with relief to the announcement. The US dollar rose around one percent on Friday against several major currencies. As the dollar strengthened, gold suffered its sharpest one-day decline since 1983, falling more than nine percent. Silver plunged 27 percent in the same session.
Analysts at Deutsche Bank identified the nomination as the main trigger. They said improved policy clarity unleashed heavy profit taking.
Equity markets feel the fallout
The metals rout quickly spread to stock markets. Asian equities fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led regional losses, dropping by more than five percent.
Hong Kong’s Hang Seng slid 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 came under severe pressure. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices sank.
Oil prices retreat amid calmer outlook
Energy markets followed the broader decline. Global crude oil prices dropped more than five percent. Traders cited steady output plans from major producers and easing tensions between the US and Iran.
Dollar strength added further pressure to oil prices. Oil trades in dollars, which raises costs for non-US buyers. That effect often curbs demand.
A record year meets sudden reality
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 fears pushed metals to repeated highs. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Profit taking overwhelms 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 interest-bearing 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 supported the rally.
However, extreme price moves left markets exposed. Mark Matthews of Bank Julius Baer told Reuters prices had turned parabolic. He said once profit taking began, selling rapidly snowballed.
