Gold tumbles to $4,900, silver crashes 25% as precious metals trade unwinds

Gold (GC=F) futures fell as much as 11% to trade below $4,800 per ounce on Friday in a severe reversal of this year’s massive rally in precious metals.

Spot gold saw its biggest daily drop since the early 80’s while silver (SI=F) also tumbled more than 25%, its largest daily decline on record in a severe reversal of this year’s massive rally in precious metals.

The volatility came alongside a wider stock market sell-off, with the major averages all lower after President Trump picked Kevin Warsh to become the next Federal Reserve chair. The appointment is seen as easing concerns about the central bank’s independence, as Warsh has historically leaned hawkish.

Strategists, however, said gold and silver’s epic rally was due for a pullback.

“The higher metals rise, the more likely 2026 will mark enduring price peaks — notably for silver — if history is a guide,” Mike McGlone, senior commodity strategist at Bloomberg, wrote on Friday.

“There are always sound fundamental reasons for rallies, but when prices rise as rapidly as they have in the metals, deficits can shift fast,” he added.

Ole Hansen, head of commodity strategy at Saxo Bank, said on Thursday that “the continued surge across metals, especially gold and silver, is entering a dangerous phase, in my opinion.”

“The problem is volatility feeding on itself. As price swings intensify, liquidity thins,” he added.

Read more: How to invest in gold in 4 steps

Just last week, Goldman Sachs analysts set a year-end price target of $5,400 for gold, with a potential upside risk due to increased participation from private-sector investors.

The precious metal rallied past $5,500 on Wednesday after the Federal Reserve held rates steady, with commentary from Fed Chair Jerome Powell doing little to stop the dollar’s slide.

“I see this as a sign that conviction levels in the Dollar-down trade are high,” Robin Brooks, senior fellow at the Brookings Institution, wrote in a note on Thursday before gold’s descent. He noted that “the weak Dollar is super-charging the debasement trade.”

Silver, which had topped $120 per ounce before paring gains, was trading at around $87 per ounce on Friday.

The precious metal is up roughly 28% year to date, following a stunning rally in 2025.

“Silver prices have already significantly overshot our forecasted averages, though calling a top is close to impossible in markets displaying near-parabolic price momentum,” JPMorgan analysts noted earlier this month.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.