On Friday, gold (GC=F) futures fell 9% to $4,800 an ounce, and silver (SI=F) fell more than 20% in this year’s biggest precious metals rally.
The volatility occurred with a widespread decline in the stock market, with all major average stock prices falling.
“The higher metal prices go, the more likely it is that, if history is any guide, we will see a permanent peak in 2026, especially for silver,” Mike McGlone, senior commodities strategist at Bloomberg, said on Friday.
He added: “There are always sound fundamental reasons for an increase, but when prices rise as quickly as metal prices, deficits can change quickly.”
“In my opinion, we are entering a dangerous phase with the continued rise in metal prices in general and gold and silver in particular,” Ole Hansen, head of product strategy at Saxo Bank, said on Thursday.
“The problem is that volatility feeds itself. As price volatility intensifies, liquidity diminishes,” he added.
Gold prices have risen about 11% since the beginning of the year as the US dollar weakened against other currencies.
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Just last week, Goldman Sachs analysts set a year-end gold price target of $5,400 with potential upside risk from increased private sector investor participation.
Precious metal prices rose above $5,500 on Wednesday after comments from Federal Reserve Chairman Jerome Powell did little to stop the dollar’s slide, with the Fed leaving interest rates on hold.
“I see this as a sign of high confidence in the dollar-down trade,” Robin Brooks, a senior fellow at the Brookings Institution, said in a note Thursday before the gold selloff. He pointed out that “the weak dollar is exacerbating the decline in the market.”
Silver, which was above $120 an ounce before paring gains, was trading around $87 an ounce on Friday.
Following the incredible rally in 2025, precious metals are up about 28% since the beginning of the year.
Analysts at J.P. Morgan wrote earlier this month: “Silver prices are already well above our average expectations, although upside is nearly impossible to discern in a market with near-parabolic price momentum.”
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X @ines_ferre.
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