Gold and silver prices extended steep losses after a sharp reversal ended a rally that had driven metals to record highs. Traders across Asia sold heavily on Monday, accelerating declines that began late last week. The sell-off followed growing confidence in US monetary leadership and a stronger dollar.
During Asian trading, 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 pushed both metals to fresh records in January amid heightened geopolitical uncertainty.
Safe-haven demand fades after leadership decision
Earlier this year, investors sought protection in precious metals as global risks mounted. Markets also questioned the independence of the US central bank. That concern eased after President Donald Trump nominated Kevin Warsh as the next chair.
Financial markets broadly welcomed the nomination. The US dollar gained about one percent on Friday against several major currencies. As the dollar strengthened, gold recorded its sharpest one-day fall since 1983, dropping more than nine percent. Silver plunged 27 percent the same day.
Analysts at Deutsche Bank identified the nomination as the clear trigger for Friday’s sell-off. They said the confirmation of leadership reduced uncertainty and prompted aggressive profit taking.
Global markets slide as commodities retreat
Commodity selling continued into Monday and weighed on equity markets. Asian stocks declined across the region. South Korea’s Kospi index led losses, falling more than five percent.
Hong Kong’s Hang Seng dropped about three percent. Japan’s Nikkei 225 fell by more than one percent. European markets opened lower, with the UK’s FTSE 100 down 0.4 percent early in the session.
Mining shares suffered particularly sharp declines. Fresnillo and Endeavour Mining each fell by around seven percent as metal prices tumbled.
Oil prices fall amid supply stability and easing tensions
Energy markets also weakened as crude oil prices dropped more than five percent. Traders cited stable output plans among major producers and signs of easing tensions between the US and Iran.
The stronger dollar added further pressure. Oil trades in dollars, which raises costs for buyers using other currencies. That dynamic often dampens demand during periods of dollar strength.
A blockbuster year gives way to volatility
Precious metals delivered exceptional gains during 2025. Gold posted its strongest annual rise since 1979. Markets faced repeated shocks from trade tariffs and concerns about inflated technology valuations linked to artificial intelligence.
Those worries pushed gold and silver to repeated record highs. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Rate expectations and scarcity shape long-term outlook
Wall Street analysts expect the Federal Reserve to cut interest rates at least twice in 2026. Lower rates usually support gold prices by reducing the appeal of yield-bearing assets.
Gold’s scarcity underpins its long-term attraction. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central banks increased bullion purchases several years ago, supporting the latest rally.
Over the past year, trade disputes and geopolitical risks further boosted demand. However, easing fears can quickly reverse gains when investors judge prices as excessive.
Mark Matthews of Bank Julius Baer told Reuters that recent declines reflect extreme positioning. He said prices collapsed after turning parabolic the previous week. Once profit taking began, he added, selling rapidly intensified.
