Gold and Silver Prices Drop Sharply Following Friday’s Decline

Gold and silver prices continued their steep decline after a dramatic reversal of the recent rally that had pushed both metals to record highs.

In Monday’s Asian trade, spot gold fell more than 9% to $4,403 an ounce, while silver dropped 15% to below $72 an ounce.

Earlier this year, investors had driven prices higher, seeking “safe haven” assets amid geopolitical uncertainty. Concerns about the independence of the US Federal Reserve also contributed to the surge. However, prices tumbled on Friday after former Fed governor Kevin Warsh was nominated to chair the central bank, a move generally welcomed by financial markets. The US dollar rose 1% against a basket of currencies, adding pressure on precious metals.

Gold experienced its sharpest single-day drop since 1983, falling over 9%, while silver slumped by 27% in one session. Analysts at Deutsche Bank cited Warsh’s nomination as the primary catalyst for the sell-off.

The decline extended to other markets on Monday. Asian stocks fell sharply, with South Korea’s Kospi down more than 5%, Hong Kong’s Hang Seng down 3%, and Japan’s Nikkei 225 losing over 1%. In Europe, the UK’s FTSE 100 opened 0.4% lower, with mining companies like Fresnillo and Endeavour Mining losing roughly 7%.

Crude oil prices also dropped over 5%, influenced by output decisions from major producers and signs of easing US-Iran tensions. A stronger US dollar further weighed on oil, making it more expensive for international buyers.

Precious metals had a record-breaking 2025, with gold posting its largest annual gain since 1979. Gold hit $5,500 and silver topped $120 earlier this year, driven by concerns over US tariffs and volatile tech stocks. Analysts anticipate at least two Federal Reserve rate cuts in 2026, which could support gold’s appeal as an investment.

The scarcity of gold adds to its attractiveness, with just over 216,000 tonnes mined worldwide according to the World Gold Council. Central bank purchases over recent years, combined with geopolitical uncertainty, boosted demand even further.

Mark Matthews, head of research for Asia at Bank Julius Baer, told Reuters that recent steep losses are partly due to profit-taking after prices had risen sharply. “Once profit taking started, it just snowballed,” he said.