The rally in precious metals came to a sudden halt on Friday, with gold, silver, and platinum all plunging in one of the sharpest daily corrections in recent history. Gold futures fell over 10% to trade near $4,750 per ounce, marking the metal’s worst day since the early 1980s.
Silver dropped by more than 25%, setting a new single-day record for percentage losses. Platinum followed, adding to a broad retreat across the sector.
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Rally Fueled by Fear
The latest rally in precious metals was fueled in part by geopolitical uncertainty, rising central bank purchases, and a weakening dollar. Foreign central banks had accumulated more gold than US Treasurys for the first time since 1996, while silver demand was boosted by industrial usage tied to reshoring and AI-related infrastructure.
However, sharp gains were increasingly seen as vulnerable. Gold had topped $5,500 earlier in the week, and silver crossed $120 – more than doubling in recent months.
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Sentiment Shift Follows Fed Shakeup
The selloff unfolded alongside a wider decline in equities and a surprise political move. President Trump’s nomination of Kevin Warsh as the next Federal Reserve chair added fresh momentum to market volatility. Warsh, seen as a hawkish voice, is expected to support tighter monetary policy – a stance that typically strengthens the dollar and pressures non-yielding assets like gold.
The announcement sparked renewed questions about the Fed’s direction, but analysts suggest the metals drop was largely technical – especially in case for silver, given how fast prices had risen in recent months. While long-term demand drivers for precious metals remain mostly intact, the current rally has simply run too far, too fast.
