Gold futures in Asian trading fell about 2 to 5 percent from record highs, retreating from a peak of roughly $5,600 per ounce to around $5,230–$5,350, while silver dropped nearly 4 percent to about $110 per ounce, down from an all time high near $122. Despite the correction, both metals are still on track for extraordinary monthly gains.
Gold and silver prices tumbled on Friday as investors around the world took profits after a historic rally that sent precious metals to record highs, a retreat accelerated by a rebound in the U.S. dollar and shifting expectations around American monetary policy.
In India, one of the world’s largest bullion markets, silver futures for March delivery fell sharply, dropping about 3 percent to roughly $4,650 per kilogram on the Multi Commodity Exchange. The decline followed a dramatic surge a day earlier, when prices climbed nearly 9 percent to an all-time high of about $5,040 per kilogram before easing by the close of trade.
Gold futures mirrored the move. Contracts for February delivery slipped about 1.3 percent to approximately $2,010 per ounce equivalent, after surging to a record near $2,170 per ounce in the previous session before paring gains.
The pullback reflected a broader recalibration after weeks of relentless buying that pushed precious metals to levels rarely seen outside periods of severe financial stress.
“After hitting record highs, gold and silver prices dropped as a rebound in the U.S. dollar triggered aggressive profit-taking,” said Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd.
The U.S. dollar strengthened after touching recent lows, reversing some of the momentum that had fueled the rally in metals. A stronger dollar typically weighs on commodities priced in U.S. currency, making them more expensive for overseas buyers and encouraging investors to rotate into cash.
Mr. Modi said prices in India fell more sharply than global benchmarks, raising concerns about parity between domestic and international markets. The dollar index rebounded from recent lows near 96, while the Indian rupee weakened to a record low against the dollar, amplifying volatility for local traders.
The rapid ascent in prices has already begun to dampen physical demand. According to the World Gold Council, central bank purchases moderated in the fourth quarter of 2025, even as strong inflows from institutional investors helped support the market. The council also warned that India’s gold imports are likely to decline this year as record prices squeeze jewellery demand in the world’s second-largest consumer of the metal.
Globally, gold prices also retreated. Comex futures for April delivery fell about 2.2 percent to roughly $5,240 per ounce during Asian trading, after touching a lifetime high above $5,620 a day earlier before settling lower. The extraordinary levels reflect a confluence of factors, including geopolitical tensions, concerns over fiscal deficits and expectations that global interest rates may eventually move lower.
“Despite the pullback, gold remains on track for its strongest monthly performance since the 1980s, amid persistent economic and geopolitical uncertainty,” Mr. Modi said.
Silver, often seen as both a precious metal and an industrial input, experienced an even steeper correction. Comex silver futures dropped nearly 4 percent to around $110 per ounce, retreating from a record high of about $122 reached in the previous session.
“Silver fell about 4% toward $110 per ounce, retreating from all-time high as investors locked in profits following the record rally, while rebound in the dollar added pressure on the metal,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.
Despite the sharp drop, Mr. Trivedi noted that silver remained on track for a gain of more than 50 percent for the month of January, its strongest monthly performance on record. The rally has been driven not only by currency dynamics but also by strong industrial demand linked to solar panels, electric vehicles and artificial intelligence infrastructure.
The selloff rippled through exchange traded funds tied to precious metals, with several gold and silver ETFs falling between 9 percent and 14 percent in a single session as prices retreated from extreme highs.
The correction also comes amid growing speculation about leadership changes at the U.S. Federal Reserve. President Donald Trump has said he intends to announce his choice to replace Fed Chair Jerome Powell, who is expected to step aside in May. Markets are weighing the possibility that a less dovish successor could keep interest rates higher for longer, reducing the appeal of non-yielding assets like gold.
“So, a potentially less dovish Fed Chairman pick, a rebound in the dollar and gold giving way to overbought conditions have contributed to the decline in the price of the precious metal,” Reuters quoted KCM Chief Trade Analyst Tim Waterer as saying.
“Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair has weighed on gold during Asian trade,” said Matt Simpson, a senior analyst at StoneX.
Still, many analysts caution against interpreting the drop as a definitive turning point. Structural drivers supporting precious metals remain intact, including persistent geopolitical instability, heavy government borrowing and expectations that real interest rates could soften over the medium term.
“The market is divided between those viewing corrections as buying opportunities and those warning of overheated conditions,” said Tanvi Kanchan, Associate Director at Anand Rathi Share and Stock Brokers.
She warned that after such explosive gains, timing a single entry point is “treacherous,” recommending that investors spread purchases over time to manage volatility.
For long-term investors, strategists say gold and silver continue to play a critical role as portfolio hedges, even as short-term price swings grow more violent. The current pullback, they argue, reflects not a collapse in confidence but a pause after one of the most aggressive rallies in decades.
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