Precious Metals Plunge: Gold Drops Below $4,900, Silver Crashes 25% in Historic Sell-Off
In a dramatic reversal of fortune, gold and silver prices collapsed on Friday, erasing a significant portion of their meteoric 2025 gains. The sell-off sent shockwaves through commodity markets, marking one of the most severe daily declines for precious metals in over forty years.
Gold futures (GC=F) plunged as much as 11%, breaching the $4,800 per ounce level. Meanwhile, silver (SI=F) faced an even steeper fall, tumbling more than 25% in its largest single-day drop on record. The volatility spilled over into equity markets, contributing to a broader risk-off sentiment. Analysts point to a confluence of factors for the sharp pullback, including profit-taking after an extended rally and shifting expectations following President Trump's nomination of Kevin Warsh, a historically hawkish figure, for Federal Reserve Chair.
"The market was running on fumes," said Michael Chen, a veteran portfolio manager at Hartford Capital. "The velocity of the recent gains was unsustainable. This correction, while brutal, was necessary to shake out speculative excess. Warsh's nomination likely accelerated the unwind by reinforcing a 'higher-for-longer' rate narrative."
Just days prior, gold had soared past $5,500 following a steady-hold decision from the Fed. The rapid decline underscores the fragile sentiment underpinning the rally. "The problem is volatility feeding on itself," noted Ole Hansen of Saxo Bank earlier in the week. "As price swings intensify, liquidity thins."
Sarah Jenkins, a retail investor from Denver, expressed sharp frustration. "It's absolute carnage. One minute analysts are touting $5,400 targets, the next everything's in freefall. This feels like the big players gamed the rally and left the little guys holding the bag. The so-called 'safe havens' turned into traps overnight."
David Miller, an economics professor at Stanford, offered a more measured view. "This is a classic market mechanism at work. The fundamental drivers for metals—geopolitical uncertainty, currency debasement fears—haven't vanished. Today's action is a severe technical correction, not necessarily a change in the long-term thesis. However, it does warn that parabolic moves rarely end smoothly."
Silver, which had briefly topped $120 an ounce, was trading near $87 by Friday's close. Despite the crash, the metal remains up roughly 28% year-to-date, a testament to the staggering scale of its earlier advance.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
Click here for in-depth analysis of the latest stock market news and events moving stock prices.
Read the latest financial and business news from Yahoo Finance.