Gold and silver keep spiraling after market meltdown
NEWS | 02 February 2026
Silver and gold prices have been on a blistering rally before last week's meltdown. Silver and gold prices have been on a blistering rally before last week's meltdown. Emmanuele Contini/NurPhoto/Getty Images Silver and gold prices have been on a blistering rally before last week's meltdown. Emmanuele Contini/NurPhoto/Getty Images lighning bolt icon An icon in the shape of a lightning bolt. lighning bolt icon An icon in the shape of a lightning bolt. Impact Link This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Precious metals extended their losses on Monday after a brutal sell-off late last week. Spot gold was down 6.4% at around $4,581 per troy ounce at 3:03 a.m. ET, after tumbling more than 10% on Friday. Despite the pullback, the yellow metal remains up about 10% year to date. Spot silver was 9.50% lower at around $77.10 an ounce after plunging as much as 36% on Friday. Trade was volatile on the first trading day of the week as prices spiked briefly into positive territory before slumping as much as 16%. Silver prices are up 3% so far this year. The declines followed a sharp meltdown on Friday after Donald Trump tapped Kevin Warsh to run the Federal Reserve after Fed Chair Jerome Powell's term ends in May. Warsh is viewed as more hawkish and more likely to preserve the central bank's independence than other candidates. That outlook hit the debasement trade — pushing the US dollar higher, weighing on dollar-denominated commodities such as gold and silver. Most importantly, Warsh supports shrinking the Fed's balance sheet, which would ease fears of a weaker dollar and help explain recent declines in gold and silver prices, wrote Vishnu Varathan, Mizuho's Asia head of research excluding Japan, on Monday in Asia. Meltdown after historic rally Before the sell-off, gold had been on a blistering yearlong rally, fueled by heavy central bank buying and geopolitical tensions. Those forces remain in place and could continue to provide support, even as speculation eases. "I think the fundamentals remain pretty well in place despite those risks around Fed independence," Daniel Hynes, a senior commodities analyst at ANZ , told Bloomberg TV, on Monday. Hynes said broad geopolitical tensions continue to support the gold market, even as he expects price volatility to remain high. "The general unbending of the world order that we hear about constantly, and the US's role within that, has really been at the crux of this haven buying, and I don't see that ending any time soon," he said. However, analysts are continuing to warn on silver, whose gains have far outpaced gold in recent months due to speculative Chinese demand. Ole Hansen, the head of commodity strategy at Saxo Bank, wrote on Friday that gold is susceptible to a pullback amid this month's surge in prices. However, price declines in gold are likely to be met with fresh demand. But silver may struggle to keep pace with gold. "Its heavy reliance — in normal times — on industrial demand could become a drag as some end users, particularly within the solar sector, increasingly seek alternative materials in order to protect margins," Hansen wrote. "In addition, a rise in scrap supply is expected in the coming months as owners cash in long-held bars, cutlery and jewellery following a seven-fold increase in prices over the past decade," he added.
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