Gold Hits Record $5,600 Then Plummets in Wild Session

Spot gold surged to a new record high near $5,600 an ounce on Thursday before reversing course to trade sharply lower in a volatile session driven by geopolitical news.

The initial spike was fueled by intense safe-haven demand after a report emerged that U.S. President Donald Trump was considering a new military strike on Iran. Spot silver followed a similar trajectory, hitting its own all-time high before plummeting into negative territory.

A Rollercoaster Day for Precious Metals

The price action for gold and silver was dramatic. After hitting a record peak of $5,595.44, spot gold fell 4.6% to trade at $5,166.98 per ounce by 10:34 ET. April gold futures saw a similar reversal, sliding 3.1% to $5,171.14 after touching a high of $5,625.89.

Silver’s moves were even more pronounced. Spot silver crashed 6.5% to $100.02 an ounce after setting a new record of $121.65 earlier in the day.

The recent rally in precious metals has been fueled by a combination of factors, including elevated global geopolitical risk, a weak U.S. dollar, and general policy uncertainty.

Iran Tensions Drive Safe-Haven Frenzy

The primary catalyst for Thursday's market whiplash was a CNN report stating that President Trump is considering a "major new strike" on Iran following stalled negotiations over the country's nuclear program and missile production.

This development heightened fears of a broader conflict in the Middle East. The report follows the recent deployment of several U.S. ships to the region and earlier threats of military action from Trump, which he framed as potential support for protests within Iran.

The president had previously urged Iran via social media to secure a "fair and equitable" deal with Washington and cease its nuclear activities. He also warned that any future U.S. attack would be far more severe than the one on Iran's nuclear sites in mid-2025. According to CNN, Trump is now weighing airstrikes against Iranian leaders and security officials, as well as additional attacks on nuclear facilities.

Any further U.S. military action is expected to be met with retaliation from Iran, escalating regional instability. This backdrop of geopolitical tension, which includes a recent U.S. incursion in Venezuela and Trump's demands concerning Greenland, has been a significant driver for safe-haven assets like gold.

Analyst Warns Gold Rally is Overextended

Despite the bullish geopolitical narrative, some analysts see signs of exhaustion. Keith Lerner of Truist downgraded gold to neutral, citing a less favorable near-term risk-to-reward profile following the metal's exceptional performance.

"Gold now sits more than 40% above the 200-day moving average – a historic extreme," Lerner noted. He acknowledged that momentum could push prices higher but warned that the sharp rally "leaves gold increasingly vulnerable."

Adding to the complex economic picture, the U.S. Federal Reserve decided to leave interest rates unchanged, as widely expected, while presenting an upbeat outlook on the economy. However, Fed Chair Jerome Powell declined to answer questions regarding the central bank's independence in light of an ongoing Department of Justice investigation.

Copper Bucks the Trend, Hits New Peak

The sharp downturn in gold prices had a spillover effect on other metals. Spot platinum, for instance, fell 3.7% to $2,521.80 per ounce.

Copper, however, proved to be a notable exception. The industrial metal held onto its gains, with benchmark copper futures on the London Metal Exchange rallying over 9% to a record high of $14,356 a tonne.

Copper's strength was attributed to reports of additional policy support for China's beleaguered property market. As the world's largest importer of copper, China's real estate sector is a critical component of global demand.