Gold and silver plunge after stunning rally reversal shock
By BBC, February 2, 2026Gold and silver prices have continued to fall after a dramatic reversal of a rally that had pushed precious metals to record highs.
In Asia trade on Monday, February 2, 2026, spot gold prices fell more than 9 per cent to Ksh572, 000, an ounce, while silver slumped by 15 per cent to less than Ksh9,3000 an ounce.
Prices hit fresh record highs in January after central banks added more bullion to their reserves and investors put money into safe-haven assets due to financial and geopolitical uncertainties.
Markets were also worried about the independence of the US Federal Reserve, but precious metals plummeted on Friday after President Donald Trump named finance industry figure Kevin Warsh as his choice to be its next boss.
Precious metals had a blockbuster year in 2025, with gold seeing its biggest annual gain since 1979.
With financial markets spooked by concerns including Trump’s tariffs and fears that artificial intelligence-related stocks were overpriced, gold and silver repeatedly hit new record highs.
Gold peaked above Ksh716,000 at the end of January 2026, while silver also hit an all-time high of more than Ksh15,500. Wall Street analysts expect the Fed to cut interest rates at least twice in 2026. Gold tends to be seen as a more attractive investment when interest rates are low.
One of the biggest appeals of gold is its relative scarcity. Only around 216,265 tonnes of the metal have ever been mined, according to the World Gold Council trade association.
While economic worries can help push up the value of gold, prices can just as easily fall when those concerns ease or when investors feel the gains have been overdone.
On Friday, January 30, 2026, spot gold saw its sharpest one-day drop since 1983, with a fall of more than 9 per cent, while silver plunged 27 per cent.
Demand for precious metals has also been driven by a range of other factors, including higher-than-usual inflation, a weak US dollar and buying by central banks around the world.
In addition, the US Federal Reserve is expected to cut interest rates again this year.
Wars in Ukraine and Gaza, as well as Washington’s seizure of Venezuelan President Nicolás Maduro, have also fuelled the price of the precious metal.
One of the biggest appeals of gold is its relative scarcity. Only around 216,265 tonnes of the metal have ever been mined, according to the World Gold Council trade association.
That’s enough to fill between three to four Olympic-sized swimming pools. The majority of that was only extracted from the earth since 1950, as mining technology advanced and new deposits were discovered.