Gold prices tumbled below the $4,200 level on Monday for the first time since December 2025, extending a historic rout that has erased more than a quarter of the precious metal’s value since its peak earlier this year.

Trading in a wide range between $4,110 and $4,536 during the session, gold was hovering around $4,120 per ounce as of 0720 GMT—a decline of 7.8% from Friday’s close. The sharp drop follows what was already the metal’s worst weekly performance in more than four decades. Last week, gold recorded its largest weekly decline since 1983, shedding more than 10% of its value amid a broader sell-off across commodities.

The latest slide marks a dramatic reversal for a metal that had been on a historic bull run. In January, gold surged to an all-time high, approaching the $5,600 threshold, driven by strong central bank buying, persistent inflation concerns, and heightened geopolitical uncertainty. However, since that peak, prices have fallen approximately 26% as investor sentiment has shifted.

Market analysts attribute the steep decline to a combination of factors, including a strengthening U.S. dollar, rising real yields, and growing expectations that major central banks will maintain tighter monetary policy for longer than previously anticipated. The unwinding of speculative long positions has further accelerated the downturn.

The sell-off has extended to other precious metals as well. Silver prices fell 8.3% to $62.2 per ounce, reflecting the broader risk-off sentiment sweeping through commodities markets.

Trading volumes remained elevated on Monday as investors continued to reassess their exposure to the precious metals sector, with some analysts suggesting that further volatility could be expected in the coming sessions as key support levels are tested. 

Market experts warn that volatility may persist in the coming weeks as investors reassess inflation trends, central bank policies, and global economic conditions. While some see the current dip as a correction within a longer-term bullish cycle, others caution that further downside risks remain if macroeconomic pressures continue to build.

Despite the recent slump, gold remains significantly elevated comparison with historical averages, indicating that underlying demand—particularly from central banks and long-term investors—has not completely disappeared. (ILKHA)