Gold (GC=F) fell 6% to around $5,000 per ounce on Friday, while silver (SI=F) fell 14% in a sharp reversal of this year’s massive precious metals rally.
The volatility was accompanied by a broader sell-off in the stock market, with all major averages lower.
“The higher metals rise, the more likely 2026 will mark lasting price peaks, especially for silver, if history is any guide,” Bloomberg senior commodities strategist Mike McGlone wrote on Friday.
“There are always strong fundamental reasons for rallies, but when prices rise as quickly as they have in metals, deficits can change quickly,” he added.
Ole Hansen, head of commodities strategy at Saxo Bank, said on Thursday that “in my opinion, the continued rise in metals, especially gold and silver, is entering a dangerous phase.”
“The problem is that volatility feeds on itself. As price swings intensify, liquidity decreases,” he added.
Gold prices have risen about 15% so far this year as the dollar devalued against other currencies.
Read more: How to invest in gold in 4 steps
Last week, Goldman Sachs analysts set a year-end price target of $5,400 for gold, with potential upside risk due to greater participation from private sector investors.
The precious metal surpassed $5,500 on Wednesday after the Federal Reserve kept rates steady, and comments from Fed Chair Jerome Powell did little to stop the dollar’s slide.
“I see this as a sign that conviction levels in the dollar decline trade are high,” Robin Brooks, senior fellow at the Brookings Institution, wrote in a note Thursday ahead of gold’s slide. He noted that “the weak dollar is fueling the downgrade trade.”
Silver, which had topped $120 per ounce before paring gains, was trading around $99 per ounce on Friday.
The precious metal is up approximately 28% so far this year, following an impressive rally in 2025.
“Silver prices have already significantly exceeded our expected averages, although peaking is nearly impossible in markets exhibiting near-parabolic price momentum,” JPMorgan analysts noted earlier this month.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X in @ines_ferre.
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