Gold tumbles to $4,900, silver crashes 25% as precious metals trade unwinds
Gold (GC=F) futures fell as much as 11% on Friday, falling below $4,800 an ounce, marking a significant reversal of the precious metals’ major rally this year.
Spot gold saw its biggest daily decline since the early 80s, while silver (SI=F) also tumbled more than 25%, the biggest daily drop on record, in a severe reversal of this year’s massive rally in precious metals.
The surge came alongside a broader selloff in the stock market; Major averages fell further after President Trump selected Kevin Warsh as the next Federal Reserve chairman. The appointment is seen as a reduction in concerns about the central bank’s independence, as Warsh has historically taken a hawkish stance.
But strategists said the epic rally in gold and silver was due for a pullback.
“As metals move higher, persistent price peaks are more likely to occur in 2026, especially for silver,” Bloomberg senior commodity strategist Mike McGlone wrote on Friday.
“There are always solid fundamental reasons for rallies, but when prices rise as quickly as they do in metals, deficits can slide quickly,” he added.
“I think the ongoing rally in metals, especially gold and silver, is entering a dangerous phase,” Ole Hansen, head of commodity strategy at Saxo Bank, said on Thursday.
“The problem is that volatility feeds on itself. As price fluctuations intensify, liquidity weakens,” he added.
Read more: How to invest in gold in 4 steps?
Just last week, Goldman Sachs analysts set their year-end price target for gold at $5,400, with potential upside risk due to increased participation from private sector investors.
The precious metal rose above $5,500 on Wednesday after the Federal Reserve kept interest rates steady, and a statement from Fed Chairman Jerome Powell did little to stem the dollar’s slide.
“I see this as a sign that belief levels are high in the Dollar down trade,” Brookings Institution senior fellow Robin Brooks wrote in a note on Thursday before gold’s slide. He noted that “the weaker Dollar is exaggerating the depreciation trade.”
Silver, which rose above $120 per ounce before losing gains, was trading at $87 per ounce on Friday.
The precious metal is up nearly 28% so far following a dizzying rise in 2025.
“Silver prices have already significantly exceeded our forecast averages, but reaching a top is nearly impossible in markets exhibiting near-parabolic price momentum,” JPMorgan analysts wrote earlier this month. he said.
Ines Ferre is Yahoo Finance’s senior business reporter. Follow him on X @ines_ferre.
