A jeweler displays gold and silver bars at his shop in downtown Kuwait City on January 12, 2026.
Yasser Al Zayat | AFP | Getty Images
Gold and silver extended losses on Monday, deepening losses from last Friday’s sell-off, as a strong dollar and profit-taking eroded the upward momentum that drove precious metals to record highs days ago.
Spot gold crashed nearly 10% on Friday when prices fell below $5,000 an ounce, dropping about 5% to $4,611.4 an ounce.
Silver, which had soared alongside gold on safe-haven demand and an influx of speculative capital, remains under pressure after last Friday’s 30% plunge, its worst day since March 1980.
Spot prices for the white metal fell more than 10% to $76.1138 per ounce as of 11:03 p.m. ET on Wednesday.
Gold and silver decline widens after historic plunge
Analysts said Friday’s pullback followed a sharp reversal on Friday, when optimism about U.S. rate cuts collided with a sudden reassessment of the Fed’s leadership after President Donald Trump nominated former Fed Director Kevin Warsh to replace Chairman Jerome Powell when his term ends in May.
“As a result, the ‘Buy America’ trade is returning and the independent bid that drove gold and silver to record highs below $5,600 and below $122 an ounce early Thursday is unwinding,” Jose Torres, senior economist at Interactive Brokers, said in a note Monday.
Christopher Forbes, head of Asia and Middle East at CMC Markets, said gold’s sharp decline reflected a typical correction after an extraordinary rally, rather than a failure of long-term bullish momentum.
Gold’s retreat was “a typical air pocket after an extraordinary run,” Forbes said. “Profit taking, dollar strength and new geopolitical headlines coming out of Washington burst the bubble in crowded trading.”
The dollar index, which measures the dollar’s strength against a basket of currencies, has risen about 0.8% since Thursday.
A stronger dollar makes dollar-priced gold less attractive to foreign buyers, while higher interest rates make U.S. Treasuries more attractive as a safe haven, raising the opportunity cost of owning the interest-free yellow metal.
Mr. Warsh has advocated tight monetary policy, and his announcement as Fed chairman caused the dollar to rise. At the same time, President Trump’s statements hinting at a possible deal with Iran appear to have allayed geopolitical concerns. WTI crude oil Futures fell about 4% on Monday.
In the short term, gold prices will continue to rise but be volatile as markets await further clarity on Warsh’s policy direction, Forbes said.
Silver prices are still up about 16% since the beginning of the year, and gold prices are also up about 8% since the beginning of the year. Both gold and silver saw record highs last year, soaring around 65% and 145% respectively.
“A resurgence of dollar weakness and confirmation of a dovish warsh will bring bullish buying back,” Forbes said, adding that he remains bullish on bullion over the 12-month horizon, and if growth and inflation remain uneven and the Fed continues to ease, bullion could return to recent highs.
