Monday brought relief to precious metals investors as gold and silver recovered from severe losses that had rattled financial markets worldwide. Gold prices bounced back from an 8% plunge to $4,465 per ounce, settling at $4,700 despite remaining down 3.5% for the session. Last week’s trading had seen the metal approach $5,600 per ounce.
Silver demonstrated similar volatility, falling 7% before recovering to $79.60 per ounce, following Friday’s devastating 30% decline. The metals’ stabilization provided support for Britain’s blue-chip stock index, which achieved a historic milestone by breaking through 10,300 and closing at 10,341 points after hitting 10,345 intraday.
The precious metals sector had been experiencing sustained rallies as investors sought protective assets amid rising global tensions and uncertainty about Federal Reserve independence from political influence. The market shift began Friday with the announcement that Kevin Warsh, a former Federal Reserve governor with strong institutional credentials, had been selected as the next Fed chair. Warsh will succeed the current chairman in May if approved by the Senate.
Market experts suggest the selloff reflects investor confidence that monetary policy won’t be compromised by political considerations. Susannah Streeter from Wealth Club explained that Warsh’s deep Federal Reserve expertise indicates he won’t capitulate to pressure, triggering a major repositioning away from defensive assets. Pepperstone’s Michael Brown described the initial Friday movement as a complete “meltdown in the metals space.”
Additional market movements included bitcoin’s 1.8% recovery though still trading below $80,000, and oil prices declining 4% to approximately $65.24 per barrel on reduced geopolitical concerns. Analysts at Jefferies noted the selloff eliminated overcrowded positions, with speculative metrics falling substantially, while Deutsche Bank maintains its $6,000 gold price target for the year.