Gold Slides Under $5,000 as Metals Rally Reverses Sharply

By Staff, Agencies

Gold prices fell below $5,000 per ounce on Friday after speculation that the US Federal Reserve may soon be led by a more hawkish chair triggered a broad sell-off across metals markets. Despite the drop, gold remains on course for its strongest monthly gain since 1999, supported by sustained safe-haven demand.

The sell-off followed reports that US President Donald Trump is likely to nominate former Fed official Kevin Warsh as the next Federal Reserve chair. The prospect of tighter monetary policy strengthened the US dollar and undercut precious metals, which had surged earlier in the week.

Gold, which climbed to nearly $5,600 per ounce on Thursday, dropped as much as 8 percent on Friday, marking its steepest one-day decline in more than ten years. Prices briefly touched $4,957 per ounce, capping a volatile stretch that has seen repeated record highs amid global instability and inflation concerns.

The downturn spread across the wider metals complex. Silver fell around 15 percent, platinum dropped 16 percent, and copper declined roughly 3 percent, reversing a rally that had pushed several metals to record levels.

Analysts described the move as a classic market reversal following extreme price action. “There is confusion and uncertainty, and investors are searching for clarity,” said Tom Price, a commodities analyst at Panmure Liberum.

Investors said expectations that a Warsh-led Federal Reserve would take a firmer stance against inflation weakened one of gold’s key bullish drivers — fears of long-term dollar debasement.

In Asia, regulatory steps also contributed to the pullback. The Shanghai Futures Exchange said it had suspended multiple trading account groups and warned market participants to trade cautiously in order to preserve stability, moves that began to cool speculative activity.

Market strategists said heightened volatility was likely after such rapid gains. While some warned the market appeared heavily overbought in the short term, others maintained that gold’s longer-term outlook remains supported by diversification efforts among central banks and institutional investors.