Precious Metals Rally Stalls: Gold Plunges to $5,000, Silver Crashes 14% in Sharp Reversal

In a stunning reversal, the blistering rally in precious metals slammed into a wall on Friday. Gold futures (GC=F) plummeted 6% to settle near the $5,000 per ounce mark, while silver (SI=F) suffered a more severe blow, crashing 14%. This sharp pullback signals a potential inflection point for assets that had been on a seemingly unstoppable ascent this year.

The sell-off rippled through commodity markets alongside a broader downturn in equities, with major stock indices closing lower. The volatility underscores growing concerns that the meteoric rise in metals may have been overextended.

"History suggests that the higher metals climb, the more likely 2026 could mark enduring price peaks—particularly for silver," noted Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, in a Friday analysis. "While fundamental reasons for rallies always exist, deficits can shift rapidly when prices surge at this pace."

Echoing the caution, Ole Hansen, Head of Commodity Strategy at Saxo Bank, warned on Thursday that the continued surge, especially in gold and silver, was "entering a dangerous phase." He highlighted a self-reinforcing cycle of risk: "The problem is volatility feeding on itself. As price swings intensify, market liquidity thins."

Friday's plunge interrupts a remarkable run. Gold is still up roughly 15% year-to-date, buoyed by a weakening U.S. dollar against other major currencies. The momentum had seemed unshakeable just days ago; after the Federal Reserve held rates steady, gold briefly surged past $5,500 on Wednesday as Fed Chair Jerome Powell's comments failed to arrest the dollar's slide.

"This is a sign that conviction in the dollar-down trade is exceptionally high," observed Robin Brooks, a senior fellow at the Brookings Institution, in a note prior to the sell-off. "A weak dollar is super-charging the debasement trade."

The reversal was even more pronounced for silver. After topping $120 per ounce earlier in the week and paring gains, it was trading around $99 on Friday. Despite the drop, silver remains up approximately 28% this year, following a stunning rally in 2025.

Analysts at JPMorgan had previously noted the challenge of calling a market top, stating earlier this month: "Silver prices have already significantly overshot our forecasted averages, though calling a top is close to impossible in markets displaying near-parabolic price momentum." The sharp correction on Friday may force a reassessment of that momentum.

Market Voices: Reactions to the Plunge

David Chen, Portfolio Manager at Horizon Wealth: "This is a healthy, necessary correction. The fundamentals for metals—geopolitical uncertainty, central bank buying—haven't disappeared. This shake-out removes some speculative froth and could establish a stronger base for the next leg up, though volatility will remain high."

Sarah Miller, Independent Commodities Trader: "I've been waiting for this. The charts were screaming 'overbought' for weeks. This isn't just a pullback; it's the first crack in the dam. The leverage in the system is enormous, and when momentum reverses, it's brutal. Silver could easily test $80 from here."

Marcus Wright, Retail Investor: "It's absolute robbery! One day the banks are touting $5,400 targets, the next they're letting it crash. The little guy always gets crushed in these engineered sell-offs. They let it run up to lure us in and then pull the rug. It's a manipulated casino, not a market."

Dr. Anya Sharma, Economics Professor at Carlton University: "This event perfectly illustrates the tension between long-term structural drivers and short-term market psychology. While the dollar trend and macro fears support metals, prices had disconnected from any reasonable near-term fundamental anchor. The market is now relearning the lesson that parabolic moves are inherently unstable."

Reporting by Ines Ferre, Senior Business Reporter. Follow her on X @ines_ferre.

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