by Dejan Pekic
A Gold Market Crash … with a Silver Lining
Posted by Dejan Pekic
Last year saw a historic upswing in gold and silver prices. Gold soared 64%, reaching a record high of US$4,000/oz in October, while silver soared by an incredible 150%. In December, Morgan Global Research forecast gold prices to average US$5,055/oz by the final quarter of 2026, rising toward $5,400/oz by the end of 2027.
That took a sharp turn last Friday when US President Trump announced Kevin Warsh as his pick for the US Federal Reserve Chair. In what has been seen as a vote of confidence in Warsh’s independence, precious metal markets plunged, with more than US$15 trillion (AU$21 trillion) wiped from gold and silver markets in 24 hours.
Spot gold prices dropped by around 11 per cent to US$4,812/oz, while silver fell as much as 30% before recovering slightly. Copper and nickel prices also dropped. The previous largest one-day fall in gold and silver was in April 1987, when gold fell 5% and silver 23%. That followed a combined plunge of 28% in January 1980.
While the presidential announcement was a trigger, Friday’s drop can also be viewed as a market correction. Gold and silver values generally rise at times of instability or with inflation fears. The 2025 price surge was influenced by trade concerns, increased central bank spending and a speculative bubble, with the Warsh appointment anticipated to lead to greater US financial stability. Another factor was a strengthening US dollar, which impacted international buyers.
Volatility is part of market cycles, and as this example shows, global events can trigger sudden and unexpected swings. The silver lining? After every crash comes recovery, and downturns may also bring investment opportunities.
If you have concerns or are looking to take advantage of the market, please contact us to discuss your options.
General Advice Warning:
The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
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