Gold Falls 5% and Silver Slides 10%, Extending Sharp Sell-Off in Precious Metals

London/New York: Gold and silver prices extended their sharp sell-off on Monday, deepening losses from last week’s historic plunge as a stronger US dollar and profit-taking weighed on precious metals that had surged to record highs only days earlier.

Spot gold fell around 5 per cent to $4,611 per ounce, following a near 10 per cent drop on Friday that saw prices fall below the $5,000 mark. Silver remained under heavy pressure after suffering a 30 per cent collapse last week, its steepest single-day decline since March 1980.

Spot silver prices were down more than 10 per cent at around $76 per ounce in late trading, extending losses as investors reassessed risk and positioning across commodity markets.

Analysts said the pullback followed a violent reversal in sentiment after optimism over potential US interest-rate cuts collided with renewed uncertainty around US monetary policy leadership. Market volatility increased after Donald Trump nominated Kevin Warsh to succeed Jerome Powell when Powell’s term ends in May.

José Torres, senior economist at Interactive Brokers, said the surge that lifted gold and silver to extreme highs was beginning to unwind as the so-called “Buy America” trade regained momentum.

Market participants also pointed to a firmer US dollar as a key driver of the sell-off. The dollar index has strengthened by around 0.8 per cent since Thursday, making dollar-priced commodities more expensive for overseas buyers.

A stronger dollar, combined with expectations of tighter monetary policy, has raised the opportunity cost of holding non-yielding assets such as gold, while improving the appeal of US Treasurys.

Christopher Forbes, head of Asia and the Middle East at CMC Markets, said the sharp retreat in gold reflects a correction after an extraordinary rally rather than a breakdown in its longer-term outlook.

He added that profit-taking, currency strength and shifting geopolitical signals from Washington had removed excess speculation from the market.

Silver and gold remain higher on a year-to-date basis despite the recent sell-off. Silver is still up about 16 per cent since the start of the year, while gold has gained roughly 8 per cent. Both metals posted record-breaking rallies last year, rising about 145 per cent and 65 per cent, respectively.

Analysts expect precious metals to remain volatile in the near term as investors await clearer signals on US monetary policy and global economic conditions.