Washington: Gold and silver prices have extended steep losses, marking a sharp reversal from the record-breaking rally that pushed precious metals to historic highs earlier this year.
In Asian trading, spot gold fell more than 9 percent to around $4,403 (£3,222) an ounce, while silver slumped nearly 15 percent to below $72 an ounce. The declines followed an even more dramatic sell-off, when gold recorded its biggest single-day fall since 1983 and silver plunged by more than 27 percent.
The pullback comes after a strong start to the year for precious metals. Prices surged to fresh records in January as central banks increased bullion purchases and investors sought safe-haven assets due to financial market volatility and geopolitical uncertainty. Concerns over the independence of the US Federal Reserve had also supported gold’s rise.
However, sentiment shifted after US President Donald Trump nominated former central bank governor Kevin Warsh as the new chair of the Federal Reserve, easing some market anxieties. As confidence improved, investors moved away from defensive assets, triggering a sharp correction in gold and silver prices.
Asian equity markets also came under pressure. South Korea’s benchmark Kospi dropped more than 5 percent, leading regional losses. Hong Kong’s Hang Seng Index fell around 3 percent, while Japan’s Nikkei 225 was down over 1 percent. In global energy markets, crude oil prices declined by more than 5 percent after major oil-producing nations agreed to keep output levels unchanged.
Despite the recent slump, precious metals had a standout performance in 2025. Gold posted its strongest annual gain since 1979, repeatedly setting new records as markets were rattled by concerns over US trade tariffs, slowing global growth, and fears that artificial intelligence-related stocks were overvalued. Gold peaked above $5,500 an ounce in late January, while silver hit an all-time high above $120.
Looking ahead, Wall Street analysts expect the Federal Reserve to cut interest rates at least twice in 2026. Lower interest rates typically support gold prices, as the metal becomes more attractive when yields on other assets fall.
Gold’s long-term appeal is also linked to its scarcity. According to the World Gold Council, only about 216,265 tonnes of gold have ever been mined. Still, analysts caution that while economic uncertainty can drive prices higher, easing fears or perceptions that gains have gone too far can just as quickly lead to sharp corrections, something markets are now witnessing.
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