Gold (GC=F) fell 6% to around $5,000 an ounce on Friday while silver (SI=F) fell 14% in a sharp reversal of this year’s massive rally in precious metals.
Volatility came alongside a broader share sell-off, with all major averages lower.
“The more metals rise, the more likely it is that 2026 will mark lasting price peaks — notably for silver — if history is any guide,” Mike McGlone, senior commodities strategist at Bloomberg, wrote on Friday.
“There are always sound fundamentals for rallies, but when prices rise as fast as they have in metals, deficits can change quickly,” he added.
Ole Hansen, head of commodity strategy at Saxo Bank, said on Thursday that “the continued rise in metals, especially gold and silver, is entering a dangerous phase, in my opinion.”
“The problem is volatility that feeds on itself. As price swings intensify, liquidity thins,” he added.
Gold prices rose roughly 15% on the year as the greenback weakened against other currencies.
Read more: How to invest in gold in 4 steps
Just last week, Goldman Sachs analysts set a year-end price target of $5,400 for gold, with potential upside risk due to increased participation from private sector investors.
The precious metal rallied past $5,500 on Wednesday after the Federal Reserve kept rates steady, with Fed Chairman Jerome Powell’s commentary doing little to stop the dollar’s slide.
“I see this as a sign that the levels of conviction in the Dollar-down trade are high,” Robin Brooks, a senior fellow at the Brookings Institution, wrote in a note on Thursday before the descent of gold. He noted that “the weak Dollar is supercharging the debasement trade.”
Silver, which had hit $120 an ounce before paring earnings, was trading at around $99 an ounce on Friday.
The precious metal is up roughly 28% year-to-date, following a stunning rally in 2025.
“Silver prices have already significantly exceeded our forecasted averages, although calling a top is close to impossible in markets that show near-parabolic price momentum,” JPMorgan analysts noted earlier this month.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow it on X above @ines_ferre.
Click here for an in-depth analysis of the latest stock market news and events that drive stock prices
Read the latest financial and business news from Yahoo Finance