Gold and silver prices fell hard as investors unwound positions built during months of market anxiety. Losses deepened on Monday after a violent reversal erased much of January’s gains. The move signalled a sharp shift in sentiment across global markets.
In Asian trading on Monday, spot gold dropped more than nine percent to about $4,403 per ounce. Silver slid roughly 15 percent to below $72 per ounce. Investors had driven both metals to record highs earlier this year.
Investor fears ease after central bank nomination
Earlier rallies reflected deep concern about geopolitics and monetary policy stability. Investors also questioned the independence of the US central bank. Those worries eased after President Donald Trump nominated Kevin Warsh as the next chair.
Financial markets welcomed the decision. The US dollar gained around one percent on Friday against several major currencies. As the dollar strengthened, gold suffered its sharpest one-day fall since 1983, dropping more than nine percent. Silver collapsed by 27 percent during the same session.
Analysts at Deutsche Bank described the nomination as the main trigger. They said greater policy clarity sparked rapid selling across precious metals.
Selling pressure hits stocks worldwide
The retreat from commodities spilled into equity markets. Asian stocks fell sharply on Monday as risk appetite weakened. South Korea’s Kospi index led regional losses with a drop 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 opened lower, with the UK’s FTSE 100 down 0.4 percent early in the day.
Mining companies suffered heavy losses. Shares in Fresnillo and Endeavour Mining both dropped by about seven percent as metal prices plunged.
Oil prices slide amid calmer outlook
Energy markets also turned lower. Global crude oil prices fell more than five percent. Traders pointed to stable output plans by major producers and easing tensions between the US and Iran.
Dollar strength added to the pressure. Oil trades in dollars, making purchases more expensive for non-US buyers. That dynamic often weakens demand when the currency rises.
Record-breaking year meets abrupt reversal
Precious metals delivered exceptional returns throughout 2025. Gold recorded its strongest annual gain since 1979. Markets faced repeated shocks from trade tariffs and concerns over inflated artificial intelligence-related stock valuations.
Those fears pushed metals to repeated records. Gold peaked above $5,500 in late January. Silver also reached an all-time high above $120.
Rates, scarcity, and rapid profit taking
Wall Street analysts expect at least two US interest rate cuts in 2026. Lower rates usually support gold by reducing yields on competing assets.
Gold’s limited supply underpins its long-term appeal. About 216,265 tonnes have ever been mined, according to the World Gold Council. Central bank buying helped drive the rally that began several years ago.
However, stretched prices left markets exposed. Mark Matthews of Bank Julius Baer told Reuters metals had turned parabolic. He said once profit taking began, selling quickly snowballed.
