Gold prices slid sharply to around US$4,900 while silver suffered a steep 25% drop, as investors rapidly unwound crowded positions in the precious metals market amid shifting macroeconomic expectations.
The sell-off marks a dramatic reversal after months of strong gains driven by safe-haven demand, geopolitical uncertainty and expectations that global interest rates would remain elevated. Market participants say the latest move reflects profit-taking by institutional investors, combined with changing sentiment around inflation, monetary policy and the strength of the U.S. dollar.
Silver was hit particularly hard as prices surged earlier in the year, prompting heavy speculative inflows. As momentum reversed, traders rushed to exit positions, accelerating losses. Analysts noted that silver’s dual role as both a precious metal and an industrial input tends to amplify volatility during sharp market corrections.
Gold’s decline was more measured but still significant, as easing inflation data and renewed confidence in risk assets reduced demand for defensive holdings. Rising bond yields and a firmer dollar also weighed on bullion prices, making non-yielding assets less attractive to investors.
Bullion dealers reported increased selling activity, especially from short-term traders locking in gains after the recent rally. Some long-term investors, however, view the pullback as a correction rather than a collapse, arguing that structural factors such as central bank buying and geopolitical risks could continue to support prices over the medium term.
Market watchers say the episode highlights the fragility of sentiment in commodities markets, where rapid price gains can quickly reverse once the underlying narrative shifts. Volatility is expected to remain elevated in the coming weeks as investors reassess their exposure to precious metals in a changing global economic environment.
