Precious Metals Rally Collapses: Gold Plunges 9%, Silver Crashes 20% in Historic Sell-Off
In a dramatic turn that stunned investors, the blistering rally in precious metals evaporated on Friday. Gold futures (GC=F) plunged 9% to settle at $4,800 per ounce, while silver (SI=F) cratered by a staggering 20%—one of its worst single-day performances on record. The sell-off marked a sharp reversal from the record-breaking highs seen earlier in the week and dragged down major stock indices in a broad-based risk-off move.
The swift downturn follows a historic surge, fueled by a weakening U.S. dollar and fervent investor speculation. Just days ago, gold had breached $5,500 after the Federal Reserve held rates steady, with Chair Jerome Powell's comments failing to bolster the greenback. "This isn't just a correction; it's a liquidity event," said Ole Hansen, head of commodity strategy at Saxo Bank. "When volatility feeds on itself, the market floor can vanish. We've entered a dangerous phase."
Analysts had been warning of an overheated market. Mike McGlone, senior commodity strategist at Bloomberg Intelligence, noted prior to the plunge, "The higher metals rise, the more likely 2026 will mark enduring price peaks—notably for silver. Deficits can shift rapidly when prices run this hot." The reversal validates concerns that the parabolic ascent, which saw silver soar over 28% year-to-date after a stunning 2025, was unsustainable.
The fallout places recent bullish forecasts in a harsh new light. Goldman Sachs, which just last week set a year-end gold target of $5,400, must now account for a market suddenly gripped by fear. Meanwhile, JPMorgan analysts had earlier this month cautioned that silver had "significantly overshot" forecasts, while admitting that "calling a top is close to impossible" amid such momentum.
Market Voices:
"This was inevitable. The rally was built on speculative froth, not just fundamentals. The weak dollar trade became a crowded casino, and now everyone's rushing for the exits." — David Chen, Portfolio Manager at Horizon Capital (New York)
"Absolute carnage. The 20% drop in silver isn't a pullback; it's a crash that will wipe out leveraged retail investors. Regulators should have seen this bubble forming. It's a failure of oversight." — Rebecca Shaw, Independent Commodities Trader (London) - [Emotional/Sharp]
"A healthy, if brutal, reset. Long-term drivers like geopolitical uncertainty and monetary debasement haven't disappeared. This volatility creates entry points for disciplined investors." — Arjun Mehta, Chief Economist at Sterling Wealth Advisory (Singapore)
"The key question is whether this is a one-day panic or the start of a deeper trend reversal. The correlation with equity sell-offs suggests a broader macro shift is underway, potentially toward deflationary fears." — Professor Elena Rodriguez, Finance, Columbia University
As trading closed, silver was trading near $87 per ounce, a far cry from the $120 level touched just weeks ago. The events of Friday serve as a stark reminder of the extreme volatility lurking within even the most seemingly steadfast safe-haven assets.
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.