Global markets reacted with apprehension last Friday to a sharp drop in gold and silver prices, triggering a wave of selling that directly affected stocks and investment funds linked to these valuable metals. The surprising devaluation marked a moment of significant volatility, challenging the recent upward trajectory that characterized the sector.
Investors have watched as precious metals, traditionally considered safe havens, suffer a sharp correction, raising questions about the future stability of these assets. The repercussion was immediate, with mining companies and exchange-traded funds feeling the impact on their prices, in a scenario of economic and political uncertainty.
Devaluation reaches critical levels
The price of spot silver recorded a stunning decline, plunging 15% to close at around $98.66 per ounce, a return below the symbolic $100 mark.
Simultaneously, spot gold also experienced a notable pullback, with its shares falling 7% and trading at $5,009.46 per ounce. The move in spot markets was largely replicated on futures exchanges, where next-month gold contracts at Nova York lost 5.5%, while silver futures for February delivery fell 11%.
Global repercussion in strategic sectors
The wave of selling was not limited to gold and silver, extending across the entire precious metals market. Spot platinum also suffered, falling more than 14%, and palladium fell around 12%, highlighting widespread pressure on the category.
The impact of the devaluation was immediately visible on international stock exchanges. Na Europa, the regional index Stoxx 600
Giant companies in the sector were hit hard. Fresnillo, the world’s leading silver producer listed on the Londres exchange, saw its shares fall 7%. In the pre-market of Wall Street, silver miner Endeavour Silver plunged 14.7%, while First Majestic Silver suffered a 14.4% loss, indicating a drastic adjustment in investor expectations.
Investment funds suffer from volatility
Silver exchange-traded funds (ETFs) were particularly affected by this sharp correction. The ProShares Ultra Silver fund, for example, registered a 25% drop even before the market opened, while the iShares Silver Trust ETF lost 12.7% of its value. Essa performance highlights the vulnerability of these financial instruments to sudden movements in the prices of underlying commodities.
Precious metals such as gold and silver have seen unprecedented appreciation in the last twelve months, driven by a combination of macroeconomic and geopolitical factors. Widespread market volatility, the devaluation of the US dollar and the increase in geopolitical tensions globally contributed to these assets reaching record heights. Concern about the independence of Federal Reserve was also among the reasons for seeking security in these metals.
Expert analysis on market movement
Katy Stoves, investment manager at renowned British wealth management firm Mattioli Woods, offered perspective on developments. In an interview on Friday morning, Stoves said the recent moves likely represent a “widespread reassessment of concentration risk in the market.” Ela drew a parallel with technology stocks, especially those related to artificial intelligence, which have dominated market attention and capital flows. Segundo a specialist, gold also experienced intense positioning and a large concentration of positions. The manager highlighted that, when the majority of investors lean towards the same side, even assets considered solid can suffer declines as positions are undone, a “reckoning” for capital that floods areas with powerful narratives.
External factors and investment strategies
Toni Meadows, head of investments at BRI Ele pointed out that the devaluation of the dollar had been a pillar of support for gold prices, but the American currency is now showing signs of stabilizing, removing some of that support.
Meadows highlighted that central bank purchases have been a key driver of the long-term rally in metals, although that pace has slowed in recent months. Ele added that, even so, there are justifications for greater diversification of reserves, especially considering that trade policies and external interventions by the former US president,
Claudio Wewel, currency strategist at J. Ele cited events such as the US capture of Venezuelan president Nicolás Maduro and Washington’s threats to use military force in Groenlândia and
More recently, Wewel noted that speculation about the appointment of the next Federal Reserve president has exerted considerable influence on metals markets. Uncertainty surrounding the leadership of the world’s largest monetary authority adds a layer of complexity to investment decisions and markets’ perception of risk.
Speculation about the command of Fed intensifies
Global investors are following with great anticipation the appointment of the next president of Federal Reserve, following the announcement of Jerome Powell’s successor. The former governor of Fed,
