Monday brought significant recovery to precious metals markets following a violent selloff that had erased substantial value and created widespread concern. Gold prices advanced from an 8% collapse to $4,465 per ounce, climbing to $4,700 by afternoon despite remaining down 3.5%. Recent trading had witnessed the yellow metal approaching $5,600.
Silver demonstrated comparable volatility, recovering from a 7% drop following Friday’s punishing 30% plunge to stabilize at $79.60 per ounce. The partial recovery in metals prices contributed to Britain’s flagship equity index achieving unprecedented heights, crossing above 10,300 for the first time and settling at 10,341 after touching 10,345 during the session.
Both precious metals had been achieving successive peaks as traders pursued protection from rising international tensions and uncertainty regarding Federal Reserve political independence. The market reversal initiated Friday when the White House unveiled Kevin Warsh as its Fed chair nominee, a former governor known for his expertise and institutional knowledge. Warsh is set to take the helm in May following Senate approval.
Trading analysts characterize the selloff as positive confirmation that political loyalty won’t override economic expertise at the central bank. According to Wealth Club’s Susannah Streeter, Warsh’s substantial Fed experience indicates he won’t capitulate to pressure, triggering widespread unwinding of safe-haven positions. Pepperstone’s Michael Brown labeled the initial decline a complete “meltdown in the metals space.”
Market observers noted the movement cleared extremely crowded trading positions, with positioning metrics dropping from peak levels to more moderate ranges. Despite recent turbulence, investment bank Deutsche Bank continues projecting gold will reach $6,000 this year, while both metals preserve exceptional annual gains, with gold up 65% and silver soaring more than 120% year-over-year.
1