Gold and Silver Tumble, Volatility Explodes in Metals Market
Gold and silver plunged sharply on Friday after a strong rally over the past few days was suddenly "broken." Gold fell more than 7%, briefly falling below US$5,000/ounce, while silver was under severe pressure (a Bloomberg report said it dropped more than 16% to near US$96/ounce).
The main trigger: a strengthening US dollar after the market signaled Trump was ready to nominate Kevin Warsh as the next Fed chairman—a choice the market considered relatively hawkish (stricter on inflation). When the dollar rises, precious metals become more expensive for global buyers, accelerating selling pressure.
But this isn't just a single news story. Many analysts believe the correction was "overdue" because the previous rise in gold and silver was too rapid and technical indicators were already screaming overbought. So when a trigger occurs, the market has an "excuse" to unload positions and take profits—the result being an extreme move.
Despite today's fall, the monthly performance is still impressive: gold is still up dozens of percent in January, and silver is also still far higher than at the start of the year. This volatility aligns with the market's sensitivity to the Fed's policy direction, the strengthening dollar, and geopolitical headlines that can easily lead to fluctuating speculative positions. (yds)
Source: Newsmaker.id
