Gold and silver resume their sell-off after Friday’s meltdown
Last week’s historic wipeout came after Trump's Fed chair pick spooked markets, reversing part of a yearlong rally that had pushed prices to record highs.
Gold and silver suffered their worst losses in decades on Friday, with silver plunging more than 30% and gold sliding over 10% at their lowest points — their largest intraday declines since the early 1980s. Both recovered marginally into the end of trading on Friday, but are down again in early trading on Monday: spot gold is off 2.4% relative to Friday’s finish, and silver is down 1.4% as of 7:30 a.m. ET.
The plunge marks a dramatic reversal of a remarkable yearlong rally. Earlier last week, gold topped $5,000 per ounce for the first time, while silver also hit fresh all-time highs — fueled by steady central bank buying and heavy ETF inflows from retail traders, amid geopolitical tensions and bets on dollar weakness. Indeed, per data from SwaggyStocks, the two most discussed tickers on Reddit’s r/WallStreetBets forum last week were the iShares Silver Trust and the SPDR Gold Shares ETF. The silver-based ETF saw a particularly insane amount of discussion, with 15,399 mentions — more than 6x the mentions of TSLA, a usual retail favorite.
Goldman Sachs recently raised its year-end gold price forecast to $5,400 per ounce, underscoring just how bullish sentiment had become.
But the precious metals finally overheated on Friday after President Trump said he plans to nominate former Fed Governor Kevin Warsh to succeed Jerome Powell as chair of the Federal Reserve. The news triggered relief around the Fed’s independence — as well as skepticism that aggressive rate cuts would actually materialize — sending the US dollar higher and, in turn, weighing on non-interest-paying assets like gold and silver, which tend to struggle when the greenback rises.
