The markets experienced a shocking decline on Friday, as gold and silver prices dropped abruptly, after both metals reached record-breaking heights just days before. Silver prices decreased by almost 30%, while gold prices fell by almost 10%, which resulted in the elimination of silver price gains that had reached $120 and gold price increases that had reached to $5,600.
The movement appeared to be strong, but analysts reported that it did not create a market crash, instead the situation developed into an uncontrolled speed run, which finally ended when gravity hit it.
Long-Term Story Remains Unchanged
The analysts believe that the Long-Term narrative is intact. Major banks remain composed despite the market experiencing its steepest decline. Sucden Financial analysts predict an upcoming short-term market recovery, although they emphasize that gold and silver continue to function as secure investment options.
JPMorgan maintained its strong positive outlook, as it raised its gold price forecast for the end of the year to $6,300, while it showed investors that gold price increases will not occur through a continuous upward path.
He said,
“Long-term rally in gold has not and will not be linear, so for now we once again digest, reset and repeat”.
Deutsche Bank analyst, Michael Hsueh, supported this perspective by explaining that the price decline happened because of market volatility and not because investors lost faith in precious metals.
He said,
“Conditions do not appear primed for a sustained reversal in gold prices”.
The Trigger behind the Dip
The sell-off gained momentum after Donald Trump named Kevin Warsh as his pick for the next Federal Reserve chair. Warsh maintains a reputation of being hawkish, which raises worries about upcoming interest rate cuts, since they will not proceed at the same speed that markets expected.
The nomination raised U.S dollar value, which resulted in downward pressure on metal prices, as lower rates typically boost gold and silver market prices. Analysts mention that Warsh served as one of several factors, because ultimately prices needed to decrease after reaching extreme high values during a brief period.
Prices Cool, but Optimism Lingers
Monday afternoon showed unstable price movements, which resulted in both rough and stable conditions at that time. Silver prices reached $76.92, which represented a decline of 2%, while gold prices traded at approximately $4,651, which also showed a similar 2% decline.
The metals reached higher pricing levels during the first half of the session on Monday, where Gold reached $4,905, and Silver reached a high of $88, but they remained far below their record highs from last week.
In 2025, Gold increased its value by 65%, while silver experienced 150% growth, because of rate cuts, geopolitical tensions, and rising demand for safe-haven and industrial metals. The market shows constant price fluctuations, but current conditions show peacefulness, which will last until the next period of market instability.
Bottom Line
Most analysts interpret the gold and silver price decline as a market break, which will follow the upward trend. The price for fast-moving markets requires traders to accept market volatility as their entry fee for such operations. Long-term investors should understand that precious metals maintained their value through time, but currently they experience a temporary pause, following their active movements.
