Gold and silver posted their steepest declines in years, reversing sharply after a powerful rally that had pushed prices to record levels. Gold prices, which have added about 66.08% over the past year and 37.25% over the past six months, have fallen roughly 10.31% over the past five days and 5.35% in the most recent session. A similar pullback has also been observed in silver.
Geopolitical risks have been a primary driver of market volatility so far in 2026, with renewed tariff frictions further compounding investor uncertainty. U.S. military actions in January, a weakening U.S. dollar and concerns over Fed independence further boosted demand for defensive and safe-haven assets, supporting strong inflows into precious metal ETFs.
However, beyond these macro drivers, heavy speculative inflows also turned precious metals into a crowded trade. After losing momentum last week, gold and silver continued to slide on Monday, pressured by a stronger dollar and profit-taking.
According to Christopher Forbes, CMC Markets Asia and the Middle East head, gold’s recent retreat suggests a corrective phase after an exceptional run, without necessarily undermining the broader bullish narrative, as quoted on CNBC. The pullback supports the consensus among analysts that a price correction in precious metals was inevitable.
According to TradingView, the U.S. Dollar Index (DXY) has added 1.25% over the past five days, after falling about 1.60% over the past six months and 10.16% over the past year.
According to CNBC, following President Trump’s decision to nominate Kevin Warsh as Fed chair, the U.S. dollar strengthened as markets welcomed Warsh’s reputation and perceived independence, putting renewed pressure on gold and silver prices.
According to Reuters, after CME Group hiked margin requirements, gold and silver fell further on Monday, adding to last week’s sharp sell-off in metal prices. Per the Reuters article, rising margin requirements can pressure contracts by limiting speculative activity, curtailing liquidity and triggering position unwinds.
Preserving capital and cushioning volatility are key for investors looking to navigate a potentially tumultuous period. With precious metal prices swinging sharply and gold and silver vulnerable to near-term corrections after strong rallies, investors may increasingly look beyond precious metals.
In this environment, alternative defensive ETFs are emerging as attractive options to help cushion portfolios during periods of heightened volatility, offering stability without relying solely on gold and silver.
