In Brief:
- Gold reversed sharply from record highs, while silver suffered its worst percentage drop on record.
- Heavy profit-taking exposed speculative excess after months of relentless buying.
- Markets now brace for policy signals and geopolitical headlines to steer the next move.
Silver and gold extended their sharp reversal on Friday, turning what looked like a blow-off top earlier in the week into a full-scale unwind across precious metals.
Gold, which had pushed to just under $5,600 on Thursday, reversed aggressively and was trading around $4,800 by 18:50 GMT, marking a fall of more than 12% in a single session. The move follows several days of extreme volatility after a parabolic rally that had carried prices to unprecedented levels.
Silver suffered even heavier losses, the metal fell as much as 34% to $76 an ounce, its worst single-day percentage decline on record, after topping $120 earlier in the week. The scale of the move suggests speculative excess was fully flushed out, following Monday’s sharp drop that had already signalled strain beneath the surface.
Across markets, the correction was brutal, an estimated $10 trillion in market capitalisation was wiped out in just 24 hours as selling swept through metals, equities and risk assets. What began as profit-taking quickly snowballed into forced liquidation, marking a violent end to a rally driven by inflation fears, political uncertainty and sustained central bank buying.
Even as they collapse, prices remain historically elevated, with gold near $5,000 would have been almost unthinkable just a few years ago. Attention is now turning to lower technical levels, with some pointing to support below $4,000 where longer-term buyers may begin to step in.
Markets remain highly sensitive to upcoming catalysts, with focus on Trump’s next moves on Iran, a Supreme Court ruling on tariffs, and the first public comments from Kevin Warsh following his appointment as Federal Reserve chair, all of which could set the tone for the next phase in an already unstable market.