Gold prices plummet 8%, silver crashes 15%: Wash's news triggers a bullish sentiment in precious metals

January 30 News, the international precious metals market experienced a sudden and sharp correction. Gold, which had previously surged to a historic high, plummeted significantly on Friday, with intraday declines approaching 8%, falling to as low as $4,957 per ounce, marking one of the largest single-day drops in over a decade. Silver also fell approximately 15%, platinum declined 16%, and copper prices retreated about 3%, nearly erasing the strong gains made this week.

Market sentiment turned sharply negative, largely due to widespread expectations that Kevin Walsh will become the new Federal Reserve Chair. The news prompted the US dollar to strengthen rapidly, weakening gold buying that is primarily driven by the logic of “hedging inflation and currency devaluation.” Analysts believe Walsh is viewed as a more traditional and hawkish economist; if appointed, the Federal Reserve may adopt a more aggressive stance on inflation control, exerting direct pressure on precious metals.

Tom Price of Panmure Liberum described this market behavior as “a typical top-of-market feature,” noting that the previous rapid rally and overly concentrated positions make the market prone to chain reactions of selling once a directional change occurs. Charles-Henry Monchau of Syz also stated that after gold prices deviated from their multi-decade mean to an extreme extent, a short-term “bull surrender” is not surprising.

In Asia, regulatory interventions have also intensified the correction. The Shanghai Futures Exchange has implemented restrictions on some accounts and reminded investors to trade rationally, attempting to cool down the previous volatility.

Despite short-term pressure, some institutions still believe that global uncertainties and the trend of diversified central bank allocations may continue to support gold demand in the medium to long term. However, in a highly volatile environment, the market may enter a more cautious adjustment phase.