Precious metal Gold and silver continue to plummet
The rapid fall in the price of gold and silver continues at the start of the week. The appointment of Kevin Warsh as the successor to Fed Chairman Jerome Powell triggered an unprecedented sell-off in precious metals at the end of last week.
02.02.2026, 07:45
SDA
Admittedly, both gold and silver had skyrocketed at a dizzying pace in the preceding days, rushing from record to record. It was clear to market participants that a lot of hot air had built up.
However, the fact that the price of silver collapsed by 30 percent within a single day on Friday was unprecedented since the 1980s. Gold fell by around 9 percent.
The sell-off continued at the start of the week. At around 7.30 a.m., the price per troy ounce of gold (approx. 31.1 grams) was quoted at 4478.86 US dollars, a drop of 7.9 percent. The low for the day so far is 4439.70 dollars. Meanwhile, silver is once again down double digits. The current price of 74.17 US dollars represents a fall of 12.4 percent. The precious metal hit a low of 72.89 dollars in the morning.
By way of comparison, both metals had reached record highs as recently as Thursday. While gold peaked at 594.34 US dollars, silver changed hands at 121.64 dollars.
Traders blame the current uncertainty surrounding the future monetary policy of the US Federal Reserve for the sell-off. The appointment of Warsh as Powell's successor is fueling doubts on the markets that there will actually be a significant easing of monetary policy. Expectations of interest rate cuts had recently supported precious metal prices.
Rising US dollar also weighs on prices
Former Fed governor Warsh was long regarded as a monetary policy hawk, meaning that he has tended to advocate higher interest rates. Recently, however, he has also criticized the high interest rates. Instead, he is calling for a further reduction in the central bank's bond holdings. This could drain liquidity from the financial markets and also weigh on precious metal prices.
In addition, precious metal prices have recently been supported by the increased geopolitical risks. The US government's threats towards Iran in particular had created new uncertainty.
Precious metals - especially gold - are considered safe havens in times of crisis. Silver is also an important industrial metal that is needed for many applications relating to AI, robotics and energy.
According to financial strategists, the sharp fall in the price of gold reflects a classic correction after an extraordinary rally rather than a collapse of the longer-term bullish thesis. "The fall in the gold price is a classic bubble after an extraordinary rally," comments one market expert.
Some pressure is also coming from the US dollar. This has risen following the appointment of Warsh last Friday. A stronger greenback makes gold, which is traded in dollars, less attractive to foreign buyers, while higher interest rates increase the opportunity cost of holding the non-interest-bearing yellow metal, as they make government bonds more attractive as a safe haven.
