Gold and silver prices plunge after sharp rally – What’s behind it?

After hitting record highs last week, prices for gold and silver have fallen sharply, CBS News reports.

Gold, which topped $5,500 per ounce last week, has now dropped to below $4,500 per ounce.

The surge in precious metal prices last year was driven by global uncertainty and economic pressures. Investors typically buy gold and silver when markets are unstable, viewing them as safe-haven assets.

The sudden decline came after US President Donald Trump nominated Kevin Warsh as Federal Reserve chair, which markets interpreted as reducing the likelihood of aggressive interest-rate cuts. This made gold and silver less attractive.

Why it matters for precious metals: Gold and silver usually perform better when interest rates are low. Higher expected rates (as anticipated under Warsh) make these metals less appealing to investors.

Experts are divided on the future of precious metals: some believe prices could partially recover after the recent drop, while others think gold and silver could fall to even lower levels.