The Metal Rally Just Came to a Grinding Halt: Here’s Why
A deep dive by CA Medha Arnal and Rudra Rai
For months, gold and silver felt unstoppable.
In 2025 alone:
- Gold was up 66%
- Silver had surged 135%
They became the market’s favorite hedge—against geopolitics, a weak dollar, and fears that the U.S. Federal Reserve might lose its independence.
Then came one announcement.
President Trump’s nomination of Kevin Warsh as the next Fed chair changed the mood overnight.
Markets read this as a sign that the Fed would stay more independent and more hawkish than feared.
That flipped the story:
- The dollar jumped
- “Debasement trades” unwound
- Investors rushed to lock in profits on metals
Silver collapsed nearly 30% in a single session - its worst day since 1980. Gold fell around 10%.
This wasn’t just news. It was positioning.
A huge amount of money had piled into gold and silver over the past year. When sentiment turned, everyone tried to exit at once.
Add to that:
- A rising dollar (making metals costlier for non-US buyers)
- Profit booking after a historic rally
And the drop snowballed through U.S. trading hours.
Sources: Bloomberg, Reuters, CNBC
P.S. This is not financial advice.