Gold and silver resumed their sell-off Monday morning, adding to Friday’s historic plunge that marked their worst intraday drops since the early 1980s. Spot gold fell another 2.4 percent from Friday’s close, while silver slipped 1.4 percent in early trading, showing that last week’s shock has not fully washed out of the market.
From Mania to Margin Calls
The reversal comes after a blistering yearlong rally that pushed both metals to record highs. Gold briefly topped $5,000 per ounce last week, while silver surged on heavy retail and ETF flows, with funds like iShares Silver Trust and SPDR Gold Shares dominating retail chatter. Even Goldman Sachs had leaned into the bullish mood, recently lifting its year-end gold forecast to $5,400, a sign of just how crowded the trade had become.
Policy Shock Hits the Safe Haven Trade
The unwind accelerated after President Donald Trump said he plans to nominate former Fed governor Kevin Warsh to lead the Federal Reserve. Markets interpreted the news as supportive of a stronger dollar and less certain aggressive rate cuts, undercutting the appeal of non-yielding assets like gold and silver. With the greenback rising, the safe-haven trade quickly flipped into a positioning purge, turning a parabolic rally into a violent reset.