Gold and silver prices continued to retreat following last week’s historic slump, erasing gains from their recent rally that had lifted both metals to all-time highs. Monday’s renewed drop came as a stronger US dollar and uncertainty around Federal Reserve leadership shifted investor sentiment and accelerated profit-taking.
Spot gold fell around 6% on Monday, trading near $4,538 per ounce and deepening losses after sliding nearly 10% last Friday when prices broke below $5,000. Silver prices dropped more than 12% to approximately $74.36 per ounce, compounding the previous session’s steep declines, which marked the largest one-day loss since March 1980.
The pullback followed news late last week that President Donald Trump would nominate former Federal Reserve Governor Kevin Warsh to lead the central bank, igniting a rally in the US dollar. Market participants had previously driven gold and silver to unprecedented highs on expectations of looser monetary policy and heightened safe-haven demand, but the prospect of a more hawkish Fed chair prompted a rapid shift in positioning.
Analysts attributed the sell-off to a combination of factors, including profit-taking after an intense rally, currency volatility, and evolving geopolitical developments. The stronger greenback, which has gained around 0.8% since Thursday, reduced the appeal of dollar-denominated gold for international investors and increased the relative attractiveness of US Treasurys.
Despite the recent sell-off, both gold and silver remain higher on the year, with silver up roughly 16% year to date and gold up about 8%. Both metals recorded outsized gains in the previous year, supported by robust safe-haven flows and speculation.
Investors are expected to closely monitor statements from the incoming Federal Reserve leadership and the trajectory of the US dollar, while ongoing volatility could persist until there is greater clarity on monetary policy direction.
