Gold and silver extend slide after record-breaking rally

The selloff was triggered after US President Trump tapped Kevin Warsh to chair the Federal Reserve

Gold and silver prices fell further on Monday, extending losses after a sharp reversal of a recent rally that had lifted both to record highs.

Gold prices plunged 8% to $4,465 an ounce on Monday, breaking a streak of record highs that had briefly pushed the metal to nearly $5,600 last week, before a partial rebound. Silver dropped 7%, following a 30% slide on Friday.

The sell-off was triggered last week after US President Donald Trump said he would nominate former Federal Reserve Governor Kevin Warsh to succeed Fed Chairman Jerome Powell when his term ends in May, pending Senate confirmation. Trump said he had not asked Warsh to commit to rate cuts, calming fears that the central bank could pursue aggressive monetary policy.

Some of the earlier surge was driven by speculative buying from China, with traders pouring hot money into metals markets, Bloomberg reported, pushing metals far beyond historical trading ranges and magnifying the speed and scale of last week’s collapse.

The rally ahead of Friday’s crash generated major gains for Russia that are reportedly comparable to the value of its sovereign assets frozen in the West – around $300 billion. Unlike the frozen assets, Moscow’s gold reserves can be sold or pledged as collateral, restoring significant financial capacity.

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Gold rose above $5,500 per ounce in late January, while silver touched an all-time high above $120. Despite the recent pullback, analysts at Deutsche Bank said on Monday they still expect gold to reach $6,000 later this year.

Mohit Kumar of Jefferies said the sell-off in gold appeared to be “an unwind” of a “crowded” trade.

“Gold was one of the most crowded positions, with positioning reaching close to 8 [on a scale of -10 to 10] on our indices last week,” The Guardian quoted him as saying. “Last two days’ move has taken the positioning to just above four. Still on the long side but much less crowded, suggesting that the bulk of weaker hands have been cleaned out.”

Precious metals surged in 2025, with gold posting its biggest annual gain since 1979.