Gold and silver dropped fast. They lost more value after a deep fall last week. Volatility marks these metals amid economic shifts and global issues.
On Monday, gold prices slid by about 5%. They closed near $4,611 per ounce after a nearly 10% crash on Friday. On that day, gold dipped below $5,000 for the first time after a record rise. Silver fell more than 10% to around $76 per ounce, following a steep 30% drop last Friday—the worst day since March 1980. The change came after the metals reached high levels. They surged on safe-haven buying and extra flows from news. Earlier in the week, gold hit $5,600 per ounce while silver climbed to $122 per ounce. Experts point to several causes behind the swift drop.
A stronger U.S. dollar added to the fall. It rose about 0.8% since Thursday. Because gold and silver are priced in dollars, a firmer greenback makes them costlier for buyers from abroad. Higher interest rates also increase what investors pay to hold gold and silver, prompting many to turn to Treasury bonds instead.
Political moves sped up the sell-off. On Friday, President Donald Trump named Kevin Warsh to replace Jerome Powell as Fed Chair in May. Warsh favors tighter money rules, which pushed up the dollar and cut hopes for lower rates.
José Torres, a senior economist at Interactive Brokers, said the "Buy America" mood grew strong after Warsh’s name came up. This change pulled back the prices that had climbed to new levels. Christopher Forbes from CMC Markets said gold’s drop marks a normal step back after a huge run up. Many took profits when they saw the stronger dollar and fresh global news.
Global tensions also shifted. Trump hinted he might reach a deal with Iran, easing fears that had once pushed clicks in prices. Other goods, such as crude oil, also lost ground, with WTI futures falling about 4% on Monday.
Even with the fall, these metals remain higher than at the start of the year. Silver is up around 16% and gold about 8% so far. Both metals made big gains last year—gold by roughly 65% and silver by about 145%.
Looking ahead, experts expect more shifts. They wait for clearer signals on Warsh’s plan for money rules. Forbes thinks that if the dollar drops or if Warsh takes a soft view, buyers might return. Steady growth and rising prices might push gold and silver back near their highs if the Fed eases its stance.
