Introduction: Gold and silver slump in ‘metals meltdown’
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Commodity, precious metals and crypto asset prices are all sliding today, as the record-breaking rally in gold and silver cools.
Financial markets have begun the new week in a volatile mood, with analysts talking about a “metals meltdown” that is also rattling the equities markets.
Gold is falling back after a months-long rally drove it to a series of record highs. It’s slumped by over 8% so far this session, down to $4,465 a ounce, having hit a record high of nearly $5,600/oz just last week.
Silver is living up to its nickname of the “Devil’s Metal” (for its volatility) – it has slumped by 13% today.
Both gold and silver tumbled last Friday, the day in which Donald Trump said he would nominate Kevin Warsh to be the next chair of the Federal Reserve.
Michael Brown, senior research strategist at Pepperstone, says:
Certainly, the final trading day of January was anything but calm, being dominated by what can only be termed a meltdown in the metals space. In terms of ‘scores on the doors’, spot gold ended Friday with losses of 9%, bullion’s worst day since 2013, and fourth worst in the last 45 years.
Silver, meanwhile, shed as much as 35% at the lows, before trimming losses to end the day a still-chunky 26% lower, the worst daily loss ever, at least per Bloomberg data.
Warsh does have a reputation as a more hawkish policymaker than rival candidates, who wants to shrink the Fed’s balance sheet, so investors may be anticipating tighter monetary policy than expected (although Trump is already joking about suing Warsh if he doesn’t lower interest rates).
Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia (CBA), explains:
“A stronger U.S. dollar is also adding pressure on precious metals and other commodities, including oil and base metals.”
“The decision by markets to sell precious metals alongside U.S. equities suggests investors view Warsh as more hawkish.”
But.. KCM Chief Trade analyst Tim Waterer argues the selloff goes deeper, explaining:
“The Warsh nomination, whilst likely being the initial trigger, did not justify the size of the downward move in precious metals, with forced liquidations and margin increases having a cascading effect.”
The agenda
-
7am GMT: Nationwide house price index for January
-
9am GMT: Eurozone manufacturing PMI for January
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9.30am GMT: UK manufacturing PMI for January
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11.45am BST: Bank of England governor Sarah Breeden gives speech on ‘Next generation UK retail payments’
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3pm GMT: US manufacturing PMI for January
Key events
Saxo: historic rout in silver
The slump in silver prices was triggered by Donald Trump’s choice of Kevin Warsh to be the next chair of the Federal Reserve, says the strategy team at Saxo.
They add that this then triggered losses on futures contracts, which led to further selling – with silver tumblinng around 28% on Friday.
Saxo say:
A historic rally across precious metals turned into an equally historic rout on Friday, extending into Monday’s session as traders continued to unwind what had become an extremely crowded, one-sided trade.
Silver in particular had, for months, drawn in investors, professionals, and retail participants alike, before the move turned parabolic and increasingly unhinged. That dynamic ultimately set the stage for a sharp correction, as the exit doors proved too narrow to absorb a sudden wave of forced selling. While the initial trigger was the nomination of Kevin Warsh, which helped spark a rebound in the dollar, the depth of the slump was driven by a cascade of futures selling linked to the unwinding of ETF and options positions. The risk of second- and third-round selling remains elevated, particularly with Shanghai — the main engine of recent support — seeing sharp losses, and silver futures currently limit-down and not trading.
Speaking of seas of red….
Mining stocks tumble in London
The UK stock market is indeed falling at the start of trading, as predicted.
The FTSE 100 share index has dropped by 58 points, or 0.57% at the open to 10,167 points.
Precious metals producer Endeavour Mining has plunged by 11%, following the slump in the gold and silver price today, followed by Fresnillo (-7%).
Mining stocks are also among the top fallers, including Antofagasta (-5.3%), Glencore (-3.7%), and Anglo American (-3%).
Oil companies are also sliding, tracking the drop in crude prices overnight – BP and Shell are both down over 2%.
FTSE 100 expected to fall
The UK stock market is expected to fall when trading begins in under 15 minutes.
The FTSE 100 is on track for a 0.6% drop, according to IG’s futures market.
Derren Nathan, head of equity research at Hargreaves Lansdown, reports:
“The FTSE 100 is set to start Monday in the red. Mining stocks are likely to feel the heat as metal prices scramble to find a floor. Oil prices are also trending the wrong way for investors in commodity focussed companies. The silver bubble well and truly popped on Friday after lenders upped their margin calls to speculators. That followed Donald Trump’s nomination of Kevin Warsh, one of the more hawkish contenders in the race, for the top job at the Federal Reserve bank.
There’s no sign of a silver lining this morning either, with another double-digit decline showing on traders’ screens. Gold is following a similar but far less pronounced pattern. In industrial metals, Copper has also seen a flight of speculative funds, although here, the long-term demand runway combined with limited new production set to come on stream should provide some support
UK house prices up 1% year-on-year
UK house prices have also fallen – although it’s a better picture if you adjust for seasonal factors.
The average price of a UK property fell in January, to £270,873, down from £271,068 in December, according to Nationwide Building Society.
But thanks to the magic of seasonally-adjusted data, that’s actually a 0.3% month-on-month rise. On an annual basis, prices were 1% higher than in January 2025 too.
Nationwide reports that “continued improvement in affordability” helped drive first-time buyer activity last year.
Robert Gardner, Nationwide’s chief economist, says:
“The start of 2026 saw a slight pick-up in annual house price growth, which rose to 1.0% in January, after slowing to 0.6% in December. Prices increased by 0.3% month on month in January, after taking account of seasonal effects.
“Housing market activity also dipped at the end of 2025, most likely reflecting uncertainty around potential property tax changes ahead of the Budget. Nevertheless, the number of mortgages approved for house purchase remained close to the levels prevailing before the pandemic.
“Housing market activity is likely to recover in the coming quarters, especially if the improving affordability trend seen last year (and explored further below) is maintained.
Deutsche Bank are sticking with their forecast that gold could hit $6,000 an ounce this year.
Despite Friday’s tumble – which is continuing today – research analyst Michael Hsueh gives three reasons why:
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We argue that the adjustment in precious metal prices overshot the significance of its ostensible catalysts. Moreover, investor intentions in precious (official, institutional, individual) have not likely changed for the worse as of yet.
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Gold’s thematic drivers remain positive and we believe investors’ rationale for gold (and precious) allocations will not have changed. The conditions do not appear primed for a sustained reversal in gold prices, and we draw some contrasts between today’s circumstance and the context for gold’s weakness in the 1980s and 2013.
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We see signs that China has been a prominent driver of precious metal investment flows. Thus, the rise in SGE premiums late last week is an important sign of amplified buying interest in gold. Together these suggest the rationale for a positive outlook has not changed from that described last week
IG: extraordinary brutal sessions push gold into bear market
Gold has plunged into a bear market, reports IG analyst Tony Sycamore.
Sycamore explains:
Gold is diving sharply once again as European markets open, hitting a fresh intraday low of $4402. That is ~10% below Friday’s close of $4895 and $1200 (~ 21%) below last week’s record high of $5602.
In just three brutal sessions, gold has officially flipped from a raging bull market into a bear market according to the technical definition (a drop of 20% or more from recent highs). This kind of velocity and magnitude is extraordinary, even in a year that’s already seen parabolic gains and extreme volatility.
Silver, meanwhile, has dipped marginally below Friday’s low of $73.30 to a low of $71.31 (-15.58% on the day).
The scale of the unwind unfolding in gold today is something I haven’t witnessed since the dark days of the 2008 Global Financial Crisis—leveraged positions getting flushed, stop cascades, and panic selling reminiscent of those chaotic periods.
Asia-Pacific stock markets are a sea of red today, as share prices are hit by market volatility.
Japan’s Nikkei 225 stock index has lost 1.25%, while China’s CSI 300 is down over 2%.
But the real drama was in South Korea, where the KOSPI index has plunged by over 5%, which CNBC says prompted authorities to temporarily halt trading, according to an official note.
Copper, tin and zinc are also being hammered by traders today.
Copper futures prices in Shanghai have fallen by more than 9% today.
Tin prices plunged by 11% in Shanghai too, while in London, zinc prices are down over 4%.
Platinum has slumped by 10% this morning to $1,945 an ounce – last week it hit a record $2,918/oz, before plunging on Friday.
US dollar rallying
The US dollar is strengthening against some rival currencies today.
It’s jumped by 1% against the Norwegian crown, and is also up 0.65% against the Australian dollar – and 0.35% against the Canadian currency.
This looks like a response to Donald Trump’s choice for the next head of America’s central bank.
Ipek Ozkardeskaya, senior analyst at Swissquote, says:
The US dollar has been better bid since Friday, with the dollar index rebounding around 1% off four-year lows following news that the Federal Reserve may have a new Chair.
Kevin Warsh was chosen to be the next Fed President and will replace Jerome Powell if confirmed.
Oil falls 5%
Oil is also sliding, on hopes that the US-Iran crisis is cooling.
Brent crude is down over 5% at $65.78 a barrel, which Reuters has spotted would be the steepest single-session decline in more than 6 months.
The move comes after Donald Trump said Iran was “seriously talking” with Washington, and hinted that a deal that would avoid the use of military strikes could be agreed.
Bitcoin hits lowest since last April
Bitcoin dropped to a 10-month low in early trading today, as investors piled out of riskier assets.
The world’s largest crypto assset dropped to $74,546, its lowest level since 7 April last year – and further from its record high above $125,000 set last year.
Kyle Rodda, senior financial market analyst at capital.com, says some traders are being forced to deleverage after losing money on gold and silver contracts:
The movements in markets on Friday night were a once in a generation event. The mania in gold and silver came to an abrupt halt, with the former crashing by as much as 10% and the latter collapsing by as much as 30%. The move in gold was the largest since the 1920s. The move in silver was the largest in history.
While technically stores of value, still with strong long term fundamentals, the total collapse in precious metals prices shows that any market can become gripped by mania, especially in the age of financialisation and gamification. Given the build up of positioning and leverage involved, the sell-off is bleeding into other markets.
Effectively, a deleveraging is happening, forcing traders to sell other assets to cover losses on their losing precious metals positions. That’s contributing to the sell-off in stocks and probably contributed to Bitcoin’s plunge over the weekend.
Introduction: Gold and silver slump in ‘metals meltdown’
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Commodity, precious metals and crypto asset prices are all sliding today, as the record-breaking rally in gold and silver cools.
Financial markets have begun the new week in a volatile mood, with analysts talking about a “metals meltdown” that is also rattling the equities markets.
Gold is falling back after a months-long rally drove it to a series of record highs. It’s slumped by over 8% so far this session, down to $4,465 a ounce, having hit a record high of nearly $5,600/oz just last week.
Silver is living up to its nickname of the “Devil’s Metal” (for its volatility) – it has slumped by 13% today.
Both gold and silver tumbled last Friday, the day in which Donald Trump said he would nominate Kevin Warsh to be the next chair of the Federal Reserve.
Michael Brown, senior research strategist at Pepperstone, says:
Certainly, the final trading day of January was anything but calm, being dominated by what can only be termed a meltdown in the metals space. In terms of ‘scores on the doors’, spot gold ended Friday with losses of 9%, bullion’s worst day since 2013, and fourth worst in the last 45 years.
Silver, meanwhile, shed as much as 35% at the lows, before trimming losses to end the day a still-chunky 26% lower, the worst daily loss ever, at least per Bloomberg data.
Warsh does have a reputation as a more hawkish policymaker than rival candidates, who wants to shrink the Fed’s balance sheet, so investors may be anticipating tighter monetary policy than expected (although Trump is already joking about suing Warsh if he doesn’t lower interest rates).
Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia (CBA), explains:
“A stronger U.S. dollar is also adding pressure on precious metals and other commodities, including oil and base metals.”
“The decision by markets to sell precious metals alongside U.S. equities suggests investors view Warsh as more hawkish.”
But.. KCM Chief Trade analyst Tim Waterer argues the selloff goes deeper, explaining:
“The Warsh nomination, whilst likely being the initial trigger, did not justify the size of the downward move in precious metals, with forced liquidations and margin increases having a cascading effect.”
The agenda
-
7am GMT: Nationwide house price index for January
-
9am GMT: Eurozone manufacturing PMI for January
-
9.30am GMT: UK manufacturing PMI for January
-
11.45am BST: Bank of England governor Sarah Breeden gives speech on ‘Next generation UK retail payments’
-
3pm GMT: US manufacturing PMI for January
