Prices Fall Sharply After January Records
Gold and silver prices fell after a rapid rally that had pushed both metals to record highs in January.
Spot gold dropped nearly 10 percent at one point and silver fell about 15 percent before both recovered some ground.
Where Prices Stood Monday
After an early drop in Asian trading on Monday, gold recovered to about $4,790 per ounce, down more than 2 percent on the day.
Silver also rebounded to about $82.50 per ounce, down about 3.2 percent.
Another market snapshot described gold hovering near $4,700 per troy ounce on Monday and silver futures near $76 per ounce, extending declines from Friday.
What Markets Pointed To as the Catalyst
The decline followed a major move on Friday after President Donald Trump nominated Kevin Warsh, a former Federal Reserve governor, to be the next Federal Reserve chair.
Analysts cited that nomination as the clear catalyst for the sell off. Financial markets broadly welcomed the move, and the US dollar rose about 1 percent.
Additional Pressure From Trading Requirements
Another factor cited was a change in trading requirements for precious metals on a major exchange. The change made it more expensive for speculators to trade, adding pressure during the downturn.
The Scale of Friday’s Drop
Friday’s moves were described as historic in the source material:
- Spot gold recorded its sharpest one day drop since 1983, falling more than 9 percent.
- Silver plunged 27 percent.
Despite the drop, gold was described as roughly back to where it traded a couple of weeks earlier and still about 70 percent higher than the same time last year.
Why Gold and Silver Had Rallied
The rally was linked to investors buying safe haven assets amid geopolitical uncertainty. Markets also had concerns about Federal Reserve independence.
The precious metals surge was described as especially strong in 2025, when gold posted its biggest annual gain since 1979. Gold peaked above $5,500 in late January, while silver hit an all time high above $120.
Views From Analysts and Investors
Several market watchers described the move as a reversal of an unsustainable run. One market commentator said the parabolic moves seen recently were not sustainable.
Some investors said the volatility in safe haven assets was unsettling and advised waiting for conditions to stabilize.
Broader Market Moves: Stocks and Oil
The sell off extended beyond metals:
- Asian stocks declined, with South Korea’s Kospi down about 5 percent, Hong Kong’s Hang Seng down about 2 percent, and Japan’s Nikkei 225 lower by more than 1 percent.
- In Europe, the UK’s FTSE 100 fell early but later rose about 1 percent. Mining shares were under pressure, with Fresnillo and Endeavour Mining down more than 2 percent.
- US markets dipped early, then saw modest gains, with the S&P 500 up about 0.1 percent.
Crude oil also fell nearly 5 percent. Factors cited included major producers keeping output unchanged and signs of easing tensions between the US and Iran. The stronger US dollar was also noted as a possible contributor, since oil is priced in dollars.
Interest Rate Expectations and Longer Term Outlook
Wall Street analysts expected the Federal Reserve to cut interest rates at least twice in 2026. The source material noted that gold often becomes more attractive when interest rates are low.
One bank forecast cited continued central bank and investor demand for gold and projected prices could reach $6,300 per ounce by the end of 2026. Another forecast suggested silver could hold a higher average floor around $75 to $80 per ounce and might not fully give up recent gains.
Related Coverage
Idaho News – https://idahonews.co/idaho-news-3/
National News – https://idahonews.co/national-news/
Global News – https://idahonews.co/global-news/
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