Market News

The price of gold plunged by more than 5pc on Thursday, erasing almost all its gains from earlier in the day.

The bullion fell to $5,184 in the late afternoon in London, having previously risen above $5,500 for the first time.

Gold still remains 3pc higher than yesterday’s closing price, although the sudden drop highlights the volatility across the commodity market.

The latest swing comes after gold surpassed $5,000 on Monday.

Demand for safe-haven assets such as gold and silver has soared in recent months amid concerns over Donald Trump’s tariffs and the weakening of the dollar, which fell to a four-year low on Wednesday.

Silver also fell to $110 an ounce on Thursday afternoon, having risen to a high of $121 previously in the session.

Ole S Hansen, head of commodity strategy at Saxo Bank, warned traders to avoid chasing the precious metal rally.

He said: “The continued surge across metals, especially gold and silver, is entering a dangerous phase, in my opinion.

“In my many years following markets, I have seen this dynamic play out several times across commodities—and occasionally in other asset classes as well.”

Gold has soared by almost 100pc in the past year, while silver has rocketed by 285pc over the same period.

Mr Hansen added: “Fear of missing out can drive prices far beyond levels justified by prevailing fundamentals, and timing that turning point is notoriously difficult.”