It’s another bad day for gold and silver. Traders in precious metals are seeing both gold and silver plummet significantly as the week kicks off, with gold down nearly 7% and silver down 8% over the past 24 hours.
Worse, gold has now fallen nearly 20% since its all-time high of over $5,586 in January. Silver is down even more, falling more than 44% since its all-time high earlier this year of over $121. Here’s what you need to know.
The ‘safe haven’ trade is absent
Silver and especially gold are generally considered “safe haven” assets—assets investors turn to when economic uncertainty abounds, and they want to park their money in a valuable that isn’t likely to fluctuate much, or at least not go down in value significantly.
Safe haven assets like gold and silver contrast with other assets like stocks and cryptocurrencies, which are traditionally more volatile, especially in times of economic uncertainty.
Given their safe-haven status, it’s natural to assume that the geopolitical and economic uncertainty unleashed by President Trump’s war in Iran over the past two weeks would cause investors to flock to gold and silver.
But just the opposite has happened. After both metals hit all-time highs earlier this year, they have slowly lost value, and their sell-off has only intensified with the breakout of the Iranian war.
That incongruity has left many scratching their heads, asking “why?”
Government bonds are starting to look more attractive than metals
While any individual investor has their own reason for selling off a valuable asset, there are two likely factors that have contributed significantly to the fall in gold and silver both today and in recent weeks.
The first is solidly related to the war in Iran. While wars breed geopolitical conflict and economic uncertainty, which usually sends investors to safe-haven assets like gold and silver, they can also affect interest rates, especially if central banks need to reconsider their positions due to rising prices in things like oil, which can have a knock-on inflationary effect across the economy.
And, as the Wall Street Journal notes, thanks to the war in Iran, many investors now believe that central banks around the world are unlikely to cut interest rates this year. That’s the opposite of what investors believed before the war.
If interest rates remain the same or even increase, government bonds become more attractive due to their higher yields. This can lead investors to park their money in bonds rather than precious metals, which don’t offer a guaranteed income stream.
Profit taking after gold and silver’s great run
A second significant factor likely contributing to gold and silver’s demise recently is, ironically, how well the two metals have performed lately.
Between January 2025 and gold’s all-time high in January 2026, gold rose more than 100%. In that same timeframe, silver rose by more than 275%.
Those are massive gains. But big gains don’t translate into big profits until you sell. And it’s very likely that some of the reasons gold and silver are falling so much lately are due to profit taking, so investors can lock in some of those stratospheric gains they’ve made over the past 12 months.
Investors are generally also more interested in cashing out on assets they’ve made a killing on when the other assets they own are experiencing downturns, such as stocks. And lately, stocks have been hit hard. In the past five weeks, the Dow has lost around 9% of its value, the Nasdaq has dropped more than 6%, and the S&P has also dropped more than 6%.
Many investors fear that markets could drop further the longer the Iran war drags on, and that the resulting increase in oil prices would negatively impact the overall economy. One way to hedge against a fall in stocks is to lock in any precious metal gains by selling them.
After hitting an all-time high in January, gold is currently sitting at around $4,397. That is a price point gold last saw in December 2025. Silver is currently around $68.40, a price it has also not seen since December 2025.