Gold and Silver Prices Decline
A jeweler showcases gold and silver bars at his shop in downtown Kuwait City on January 12, 2026.
Gold and silver continued to fall on Monday, worsening from last Friday’s decline. The combination of a strong dollar and profit-taking diminished the upward trend that had previously driven precious metals to record highs just days before.
Spot gold experienced a sharp drop of nearly 10% on Friday, falling below $5,000 an ounce, and was reported at about $4,611.4 an ounce. Meanwhile, silver, which had surged alongside gold due to safe-haven demand, also faced significant pressure, enduring a staggering 30% plunge on Friday—its worst day since March 1980.
As of 11:03 p.m. ET on Wednesday, spot prices for silver slid over 10% to $76.1138 per ounce.
Analysts noted that Friday’s decline came after a dramatic reversal in market sentiment, where optimism regarding U.S. interest rate cuts clashed with a swift reassessment of the Federal Reserve’s leadership. This shift followed President Trump’s nomination of former Fed Director Kevin Warsh to take the place of current Chairman Jerome Powell when his term expires in May.
Jose Torres, a senior economist at Interactive Brokers, observed that the “Buy America” trend is resurfacing, leading to a reduction in the independent demand that had boosted gold and silver to previously unimagined levels—below $5,600 and below $122 an ounce, respectively, earlier that Thursday.
Christopher Forbes, who leads CMC Markets in Asia and the Middle East, suggested that the decline in gold prices represents a normal correction after an impressive rally, rather than an indication of a downturn in long-term bullish momentum.
He described gold’s drop as “a typical air pocket after an extraordinary run,” explaining that profit-taking, a strong dollar, and fresh geopolitical developments from Washington contributed to this shift.
The dollar index—which tracks the strength of the dollar against other currencies—has risen approximately 0.8% since Thursday. A stronger dollar tends to make gold, priced in dollars, less appealing to foreign buyers, while elevated interest rates make U.S. Treasuries more attractive, increasing the cost of holding non-interest-bearing gold.
Warsh has been known to support tighter monetary policies, and his nomination as Fed chair has likely driven the dollar’s rise. Concurrently, President Trump’s comments suggesting a possible deal with Iran seem to have mitigated geopolitical tensions.
WTI crude oil futures dropped around 4% on Monday.
In the near term, gold prices are expected to remain volatile but can rise as markets await clearer direction on Warsh’s policy stance. Silver prices are still up roughly 16% since the year’s beginning, while gold prices have increased about 8%. Both metals reached record highs last year, with gold soaring approximately 65% and silver about 145%.
Forbes concluded that if the dollar weakens again and Warsh confirms a dovish stance, bullish buying is likely to return. He maintains a positive outlook on bullion for the next twelve months, suggesting that if growth and inflation remain unpredictable, and if the Fed continues to ease, bullion could revisit recent highs.
