British News Agency

Spot gold fell about 5% to $4,611.4 per ounce in the new session, after losing roughly 10% on Friday when prices dropped below $5,000 per ounce. Silver, which had risen alongside gold on safe-haven demand and speculative capital flows, also slipped about 4% on the first day of the new week to $81.189.

According to analysts, the pullback followed a sharp reversal that resulted from optimism on Friday over U.S. rate cuts colliding with a sudden reassessment of Federal Reserve leadership, after U.S. President Donald Trump nominated former Fed Governor Kevin Warsh to replace Fed Chair Jerome Powell, whose term ends in May.

Forbes said the drop in gold represented “a classic air pocket after an extraordinary rally,” adding that “profit-taking, a stronger dollar and new geopolitical headlines from Washington rattled crowded trades.”

The dollar index, which measures the greenback’s strength against a basket of currencies, has risen about 0.8% since Thursday.

Analysts note that a stronger dollar makes dollar-priced gold less attractive to foreign buyers, while higher interest rates increase the appeal of Treasury bonds as safe havens, raising the opportunity cost of holding the non-yielding yellow metal.

According to Forbes, gold prices are expected to remain elevated but volatile in the near term, as markets await greater clarity on Warsh’s policy direction.

Silver prices are still up about 16% year to date, while gold prices have risen roughly 8% since the start of the year. Last year, gold and silver saw record-breaking rallies of about 65% and 145%, respectively.