Gold and silver prices have continued their decline, extending a sharp reversal from a rally that previously propelled precious metals to record highs.
After reaching new peaks in January, fueled by investors seeking “safe haven” assets amid geopolitical instability, metals prices retreated following the nomination of Kevin Warsh to lead the U.S. Federal Reserve.
Spot gold experienced its most significant single-day drop since 1983 on Friday, plummeting over 9%, while silver saw a 27% decline before partially recovering on Monday.
Despite a strengthening dollar, the FTSE 100 defied a weak start to achieve new highs, closing up 1.2% at 10,341.56 points, a record closing figure, and reaching an intra-day high of 10,345.48.
As of 17:00 GMT on Monday, gold was down 4.6% at $4,659.16 per ounce, and silver had decreased by 7.63% to $78.70.
These figures place both precious metals well below their recent record highs of over $5,500 and $120, respectively, attained the previous week.
Analysts have also cited changes in trading requirements on a major exchange, which increased trading costs for speculators, further contributing to the downward pressure on prices.
“Many investors sought refuge in gold and silver as a hedge against geopolitical volatility, only to discover that these assets can be volatile themselves,” commented Russ Mould, investment director at AJ Bell.
Market concerns regarding the independence of the U.S. Federal Reserve were also alleviated by the nomination of Warsh, a former central bank governor, which was generally well-received by financial markets and triggered a 1% rise in the U.S. dollar’s value.
The selection also eased concerns about the Fed’s independence following a series of attacks on incumbent Jerome Powell over his reticence to cut rates as quickly as the president wanted.
Despite the recent sharp declines, gold prices have only returned to levels seen a few weeks prior and remain approximately 70% higher than at the same time last year.
Alongside the continued commodity sell-off on Monday, Asian stock markets also experienced declines, with South Korea’s Kospi leading the losses with a 5% drop. Elsewhere in the region, Hong Kong’s Hang Seng fell by 2%, and Japan’s Nikkei 225 was down by more than 1%.
In Europe, the UK’s FTSE 100 initially fell but subsequently recovered to rise by 1.2%. The decline in commodity prices put pressure on mining companies, with gold miners Fresnillo and Endeavour Mining both down by more than 2%.
U.S. stock markets initially dipped but then saw modest gains, with the S&P 500 index up 0.5%.
In global energy markets, crude oil prices fell by nearly 5%, attributed to factors including major oil producers’ agreement to maintain current output levels and indications of de-escalating tensions between the U.S. and Iran.
The rise in the U.S. dollar’s value may also have contributed, as oil prices are denominated in dollars, making it more expensive for non-U.S. buyers.
Precious metals had a blockbuster year in 2025, with gold seeing its biggest annual gain since 1979.
One of the biggest appeals of gold is its relative scarcity. Only around 216,265 tonnes of the metal have ever been mined, according to the World Gold Council trade association.
Bitcoin tumbled below $75,000 on Monday, following a slide on Friday, as investors pulled back from risky assets and progress on US cryptocurrency legislation stalled.
Digital currencies soared after Trump was re-elected in November 2024, as he was widely viewed as a strong supporter of the sector.
But the price of Bitcoin has now slipped back to pre‑election levels, as many investors rushed to sell off risky assets.
Additionally, attempts to regulate crypto have stalled in the US Senate, adding uncertainty.
Meanwhile, Trump’s close relationship with the crypto sector – alongside ventures he has promoted since returning to office – has renewed accusations of conflicts of interest.
According to recent Bloomberg estimates, his family’s fortune grew by $1.4bn last year from digital assets alone. Hours before his January 2025 inauguration, the president launched his own cryptocurrency, $TRUMP, which has since lost about 90% of its value from its peak.
Experts say there are things to consider before selling off your gold or silver.
Gold has fallen from recent highs but there are several reasons investors are still finding refuge in the precious metal.
Gold is seen as a so-called safe-haven asset that investors buy in times of uncertainty and low interest rates.
Donald Trump’s plan to impose import taxes over Greenland pushed investors toward precious metals.
Investors bet the action may open opportunities to tap the country’s oil wealth.