Gold tumbled sharply Thursday in a sudden wave of selling that swept across financial markets, as traders liquidated metal positions to cover mounting losses in equities. The sharp decline underscores how even traditional safe-haven assets can be caught in broader risk-off moves when volatility spikes.
Bullion fell as much as 4.1% during the session before trimming some losses, while silver plunged as much as 11% in one of its steepest drops in recent memory. Copper also slid, declining nearly 3% on the London Metal Exchange. The move came amid renewed pressure on U.S. technology stocks, where concerns resurfaced about whether massive artificial intelligence investments will generate the expected returns.
As equity markets weakened, some investors were forced to raise cash quickly. In moments of intense stress, even defensive assets such as gold can be sold to meet margin calls or offset losses elsewhere. Rather than serving purely as a haven, gold briefly became a source of liquidity.
The speed of the decline suggested systematic and momentum-driven selling. Analysts noted that algorithmic strategies and commodity trading advisors likely accelerated the drop as key technical levels gave way. Such strategies often amplify moves in either direction, particularly when market sentiment shifts abruptly.
Part of Thursday’s pressure also stemmed from profit-taking. Gold and silver have been on a powerful rally since 2024, with momentum-driven buying pushing both metals to repeated record highs. That advance stalled abruptly late last month, when gold posted its largest one-day drop in more than a decade and silver recorded a historic plunge. Since then, both metals have traded in a volatile but relatively tight range, lacking fresh catalysts to sustain the upward momentum.
The latest decline does not necessarily signal the beginning of a sustained downtrend. Instead, it highlights heightened volatility in a market where positioning had become crowded. When sentiment-driven trades unwind, price swings can be exaggerated.
Despite the recent rout, many major banks remain bullish on gold’s longer-term outlook. Analysts continue to point to structural drivers that supported the earlier rally, including persistent geopolitical tensions, concerns about central bank independence, and a broader shift by some investors away from traditional assets such as currencies and sovereign bonds. Several institutions maintain ambitious year-end targets for bullion, arguing that underlying demand remains intact.
Silver faced additional pressure from options-related activity tied to the iShares Silver Trust, the world’s largest silver exchange-traded fund. Investors who had previously accumulated bullish positions near recent highs were seen selling contracts, potentially intensifying downside momentum.
Market participants are now turning their attention to upcoming U.S. economic data, including core consumer price figures, for signals about the Federal Reserve’s interest-rate trajectory. Precious metals typically benefit from lower borrowing costs, as they do not offer interest payments and tend to compete with yield-bearing assets.
By early afternoon in New York, spot gold was down nearly 3% at $4,938.38 an ounce. Silver had dropped more than 9% to $76.34, while platinum and palladium also declined. The Bloomberg Dollar Spot Index edged slightly higher.
The episode serves as a reminder that in periods of extreme market stress, no asset class is immune from volatility. Even gold, long regarded as a financial safe haven, can fall sharply when liquidity becomes the priority.
