Gold and silver are having a “gravity day” after an explosive run-up earlier this week. By midday in New York, spot gold was down about 8.9% to ~$4,915/oz and spot silver was down about 21.9% to ~$90.7/oz—both coming off fresh record highs set very recently. (Reuters)
The quick read: what happened?
- Gold had just printed a record high near $5,594.82 before snapping lower. (Reuters)
- Silver had recently hit an all-time high near $121.64, then saw a sharp reversal. (Reuters)
- Despite today’s drop, gold was still tracking a strong January gain (nearly +12% on the month in Reuters’ midday snapshot). (Reuters)
5 key drivers behind today’s move
1) A Fed “policy path” re-price (Kevin Warsh nomination)
Markets reacted to news that President Donald Trump said he will nominate former Fed Governor Kevin Warsh to succeed Jerome Powell, which cooled expectations for aggressive rate cuts. When traders think rates may stay higher for longer, it can reduce the appeal of non-yielding assets like gold and silver. (Reuters)
2) U.S. dollar bounce = headwind for dollar-priced metals
The U.S. dollar strengthened (~+0.7% in Reuters’ reporting), which tends to pressure precious metals because it makes them more expensive for buyers using other currencies. (Reuters)
3) Yields and “real rate” expectations shifted
Today also featured “macro tightening” vibes: yields moved up and inflation data came in hotter than expected in broader market coverage—another combination that can weigh on metals (especially if it implies stickier policy). (Reuters)
4) Profit-taking after a melt-up (and crowded positioning)
Reuters framed the move as a classic post-rally shakeout: investors who chased the surge earlier in the week locked in profits, and the market got reminded it’s a two-way street. (Reuters)
5) Technical levels + volatility can amplify declines
Big round numbers (think ~$5,000 gold / ~$100 silver) can act like psychological battlegrounds, and rapid drops can trigger stop-losses, margin calls, and forced de-risking, making the move feel outsized. Reuters also noted the market’s “fear of missing out” phase can flip to fast selling when the narrative shifts. (Reuters)
Why the rally happened in the first place (context for the whiplash)
Before today, the dominant driver was safe-haven demand amid geopolitical and economic uncertainty, which helped push gold (and silver) to repeated record highs. (Reuters)
On the bigger-picture demand side, the World Gold Council reported that 2025 total gold demand (including OTC) exceeded 5,000 tonnes for the first time, helped by strong investment activity (including ETF demand). (World Gold Council)
What to watch next (simple checklist)
- Fed messaging: does the market further reprice the rate path after today’s Fed-chair news? (Reuters)
- Dollar + Treasury yields: if both keep rising together, that’s often a headwind for metals. (Reuters)
- Positioning/flows: after a record-high run and a record-sized pullback, watch for stabilization (or additional liquidation). (Reuters)
- Geopolitical headlines: safe-haven bids can return quickly if risk spikes. (Reuters)
Educational only — not financial advice.
