Monday witnessed significant recovery in precious metals markets after a historic downturn that had unsettled financial centers globally. Gold advanced from an 8% collapse to $4,465 per ounce, recovering to $4,700 though still posting a 3.5% decline. Recent trading had witnessed the metal approaching $5,600 per ounce.
Silver exhibited similar volatility, climbing from a 7% decline following Friday’s devastating 30% plunge to stabilize at $79.60 per ounce. The metals’ stabilization contributed to Britain’s flagship stock index achieving a landmark milestone, crossing above 10,300 for the first time and settling at 10,341 after touching 10,345 during the session.
Both metals had been climbing relentlessly as investors sought safe havens amid rising geopolitical risks and concerns regarding Federal Reserve independence from political influence. The turnaround initiated Friday when the administration announced Kevin Warsh, a former Fed governor known for his expertise and institutional knowledge, as the nominee for chairman. If confirmed, Warsh will replace the incumbent when his term ends in May.
Trading experts explain the selloff as investor approval of maintaining central bank independence. According to Wealth Club’s Susannah Streeter, Warsh’s substantial Federal Reserve expertise indicates he won’t bow to pressure, triggering major repositioning away from defensive assets. Pepperstone’s Michael Brown labeled the initial movement a complete “meltdown in the metals space.”
Market observers at Jefferies noted the selloff cleared extremely crowded trading positions, with positioning indicators falling from peak to moderate levels. Despite recent turbulence, both precious metals preserve exceptional year-over-year gains, with gold up approximately 65% and silver surging more than 120%, while investment bank Deutsche Bank continues projecting gold will reach $6,000 this year.
