Gold (GC=F) fell 6% on Friday to around $5,000 an ounce, while silver (SI=F) fell 14%, a sharp reversal of the precious metal’s sharp gains this year.
The volatility came amid a broader sell-off in the stock market, with major averages lower.
“If history is any guide, the higher metal prices rise, the more likely a durable price peak is in 2026, especially silver,” Mike McGlone, senior commodities strategist at Bloomberg, wrote on Friday.
“There are always sound fundamental reasons for increases, but when prices rise as quickly as metals do, the deficit can shift quickly,” he added.
“I think the continued surge in metals, especially gold and silver, is entering a dangerous phase,” Ole Hansen, head of commodity strategy at Saxo Bank, said on Thursday.
“The problem is volatility itself. As price volatility increases, liquidity decreases,” he added.
Gold prices are up about 15% so far this year as the dollar weakens against other currencies.
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Just last week, Goldman Sachs analysts set a year-end price target for gold of $5,400, with potential upside risks due to increased participation from private sector investors.
Precious metal prices rose above $5,500 on Wednesday after the Federal Reserve kept interest rates steady, with comments from Fed Chairman Jerome Powell failing to stem the dollar’s slide.
“I think this indicates a high level of conviction in the dollar decline trade,” Brookings Institution senior fellow Robin Brooks wrote in a note before gold prices fell on Thursday. “A weaker dollar is exacerbating depreciating trade,” he noted.
Silver topped $120 an ounce before giving back gains and was trading around $99 an ounce on Friday.
The precious metal is up about 28% year to date following a stunning rally in 2025.
JPMorgan analysts noted earlier this month that “silver prices have moved well beyond our average forecast, although calling it a peak is nearly impossible when the market is showing near-parabolic price momentum.”
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X: @ines_ferre.
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