Gold and silver prices fell sharply as investors accelerated an exit from once-popular safe-haven assets. The downturn extended losses from Friday and marked a decisive break from January’s record-setting rally. Markets shifted focus toward a stronger dollar and easing policy fears.
During Asian trading on Monday, spot gold dropped more than nine percent to roughly $4,403 per ounce. Silver slid about 15 percent to below $72 per ounce. Both metals had surged earlier this year amid heightened geopolitical tension.
Market confidence returns after US policy signal
Investors previously piled into precious metals to hedge against political and economic risk. Doubts over US central bank independence added to that demand. Those concerns faded after President Donald Trump nominated Kevin Warsh as the next central bank chair.
The decision reassured financial markets. The US dollar climbed around one percent on Friday against several 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 triggered the sell-off. They noted that reduced uncertainty encouraged rapid profit taking across metals.
Equity markets slide as selling spreads
The commodity sell-off spilled into stock markets worldwide. Asian equities fell broadly on Monday as risk appetite weakened. South Korea’s Kospi index led regional losses with a decline exceeding five percent.
Hong Kong’s Hang Seng fell around three percent. Japan’s Nikkei 225 dropped 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 recorded heavy losses. Fresnillo and Endeavour Mining both fell by about seven percent as metal prices tumbled.
Oil prices fall on supply and dollar strength
Energy markets also moved lower. Global crude oil prices dropped more than five percent. Traders pointed to stable production plans among major exporters and easing tensions between the US and Iran.
The rising dollar added further pressure. Oil trades in dollars, which raises costs for non-US buyers. That effect often suppresses demand during periods of dollar appreciation.
A historic rally unravels
Precious metals delivered exceptional gains during 2025. Gold recorded its strongest annual rise since 1979. Markets remained unsettled by trade tariffs and fears that artificial intelligence-linked stocks were overvalued.
Those concerns pushed metals to repeated records. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Interest rates and profit taking drive reversal
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates typically support gold by reducing returns on bonds and cash.
Gold’s limited supply underpins long-term demand. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying helped fuel the rally that began several years ago.
However, stretched valuations left markets vulnerable. Mark Matthews of Bank Julius Baer told Reuters prices had gone parabolic. He said once profit taking began, the sell-off quickly snowballed.
