Gold and silver extended selling on Monday, deepening losses following Friday’s slump, as a stronger U.S. dollar and profit-taking drained momentum from a rally that had pushed gold prices to record highs just days earlier.

spot gold Gold prices fell below $5,000 an ounce on Friday, plunging nearly 10% and falling about 5% to $4,617.07 an ounce.

Silver, which has soared alongside gold on safe-haven demand and speculative inflows, also remains under pressure after a 30% plunge on Friday, its worst day since March 1980. spot price The white metal fell more than 4% to $80.63 an ounce.

Analysts said Friday’s pullback was a sharp reversal, when optimism surrounding a U.S. rate cut collided with a sudden reassessment by Fed leadership after President Donald Trump took office. Nominate Former Fed governor Kevin Warsh will succeed Chairman Jerome Powell when his term ends in May.

“The ‘Buy American’ trade has thus returned, and the independent bids that drove gold and silver to record highs below $5,600 and $122 an ounce early Thursday morning are unraveling,” José Torres, senior economist at Interactive Brokers, said in a report on Monday.

Christopher Forbes, head of Asia and the Middle East at CMC Markets, said the sharp pullback in gold prices reflected a classic correction after an extraordinary rally rather than a collapse of the long-term bullish thesis.

Forbes said gold’s pullback was a “classic bubble after an extraordinary rally.” “Profit-taking, a stronger dollar and new geopolitical headlines from Washington have removed the froth from a crowded trade.”

The U.S. dollar index, which measures the greenback’s strength against a basket of currencies, has risen about 0.8% since Thursday.

A stronger dollar makes dollar-denominated gold less attractive to foreign buyers, while rising interest rates make U.S. Treasuries more attractive as a safe haven, raising the opportunity cost of holding the non-interest-bearing bullion.

Warsh has been an advocate of tightening monetary policy, and his announcement as Fed chairman pushed the dollar higher. Meanwhile, Trump’s statement that a deal with Iran was possible appeared to ease geopolitical concerns – West Texas Intermediate Crude Oil Futures fell about 4% on Monday.

Forbes said that in the short term, gold prices will remain high but volatile as the market awaits further clarity on the direction of Warsh’s policy.

Silver prices are still up about 16% since the beginning of the year, while gold prices are also up about 8% so far this year. Last year, both gold and silver saw record gains, surging approximately 65% ​​and 145% respectively.

“Renewed dollar weakness or confirmation of a dovish Warsh will bring bargain hunters back,” Forbes said. Forbes still maintained its bullish case for gold prices over the longer 12-month period, adding that if the Fed continues to ease policy while economic growth and inflation remain uneven, gold prices may return to recent highs.