Gold and silver prices experienced a significant downturn recently, igniting a global sell-off that affected both stocks and funds associated with these precious metals. As of early Friday morning, spot silver witnessed a dramatic drop of 15%, settling at approximately $98.66 per ounce, falling below the noteworthy $100 threshold. Concurrently, spot gold saw a decrease of 7%, trading at $5,009.46 per ounce.
Futures exchanges were similarly impacted, with front-month gold contracts declining by 5.5% in New York. Silver futures for February delivery dropped 11%, highlighting a broader trend that affected the entire precious metals market. Spot platinum was down more than 14%, while palladium fell close to 12%. This widespread decline rippled through stock markets globally, particularly affecting Europe, where the regional Stoxx 600 Basic Resources index dropped by 3.2%. Among the largest casualties, London-listed Fresnillo, the world’s leading silver producer, was down by 7%. In pre-market trading on Wall Street, silver miners such as Endeavour Silver and First Majestic Silver saw losses of 14.7% and 14.4%, respectively, with silver ETFs also suffering significant hits. The ProShares Ultra Silver fund plummeted 25%, while the iShares Silver Trust ETF decreased by 12.7%.
Despite this recent volatility, precious metals had enjoyed a remarkable rally over the preceding 12 months, largely fueled by market instability, a weakening U.S. dollar, increasing geopolitical tensions, and concerns surrounding Federal Reserve policies. Gold and silver experienced monumental rallies in 2025, with gold soaring by 65% and silver achieving a staggering 150% gain. The upward momentum for both metals continued into 2026, with silver adding 37% and gold up 15.4% year-to-date.
Analysts attribute the latest sell-off to a reassessment of market risks. Katy Stoves, an investment manager at Mattioli Woods, suggested that an intense crowding in gold investments had led to this unwinding of positions. “Just as tech stocks — particularly AI-related names — have dominated market attention and capital flows, gold has similarly seen intense positioning,” she noted. This sentiment was echoed by Toni Meadows, head of investment at BRI Wealth Management, who remarked that gold’s surge to the $5,000 level occurred “too easily.” He highlighted that while central bank buying fueled gold’s long-term rally, this support appeared to diminish in recent months.
Claudio Wewel, an FX strategist at J. Safra Sarasin Sustainable Asset Management, attributed part of the recent surge in precious metals to a confluence of geopolitical events, including the U.S. involvement in Venezuela and military threats against various countries. He noted that speculation surrounding the potential nomination of the next Federal Reserve chair also played a role in influencing metal markets.
As global investors brace for announcements regarding the Federal Reserve’s leadership, financial analysts continue to monitor the evolving situation, emphasizing the need for diversification amidst fluctuating markets and the potential risks connected to U.S. assets.
