Gold and silver prices fell sharply after hitting record highs earlier last week. Experts explain this phenomenon.
The price of gold has dropped significantly in just a few days. PHOTO: Shutterstock
Gold and silver saw a sharp drop in prices after hitting historic highs earlier last week. The price of gold fell from a record high of $5,600 an ounce to $4,770, while silver lost 31% of its value on Friday, marking the precious metal's biggest percentage drop since March 1980.
Gold hit a new high on Thursday, trading at $5,600 an ounce and silver at $120 an ounce. Suddenly, however, prices began to fall, and by Friday evening gold was already trading below $4,800 an ounce. That volatility was accentuated by moves in futures contracts, which dipped below $5,000, indicating a possible wider correction, according to Euronews.
The “gold rush” intensified in early 2026, as people around the world flocked to buy bullion or sell gold they already owned. Thus, while some sold their jewelry, others invested in coins, bullion or exchange-traded funds, treating the value of the metal in a similar way to stocks.
The surge in interest in gold and silver is largely the result of geopolitical and economic uncertainty, experts say, because in turbulent times people often look for assets considered “safe,” and gold has historically been a financial refuge at such times.
Precious metal prices have risen significantly during the COVID-19 pandemic and amid trade and political tensions brought about by the Trump administration.
The latest highs coincided with escalating geopolitical tensions in Venezuela and Iran, Trump's remarks on Greenland and his increasingly tough stance on US allies.
“There has been a real rupture in the way we perceive the functioning of the world order, if we want to call it that,” said Daniel McDowell, a professor of political science at Syracuse University, explaining that during periods of instability, buying gold was often a “psychological reaction” for those looking for a safe place for their money.
At the end of last week, however, the price of gold and silver fell rapidly, as volatility increased after the announcement that President Donald Trump would nominate Kevin Warsh, a former official of the Federal Reserve, to the position of governor of the US central bank.
Experts say gold's recent decline has coincided with a weaker U.S. dollar and questions about the Fed's future independence, as the appointment of Kevin Warsh to replace Jerome Powell could reflect greater White House influence over monetary policy and reduce the Federal Reserve's traditional independence.
This move created uncertainty in the gold and silver markets, contributing to the sharp price correction. Kevin Warsh's nomination must be confirmed by the Senate and, until then, investors are carefully watching developments that may influence the price of precious metals in the coming period.
