Precious metal market continue to witness greatest liquidation in history as over $4/02 trillion has been wiped out today.
This comes after an epic rally that pushed gold to all-time highs around $5,600/oz and silver north of $120/oz just last week.
Quick Update on Prices (as of \~11:30 AM WAT / \~10:30 AM UTC):
* Gold: Spot price around $4,680/oz (bid/ask\~$4,680/$4,682), down $209 (4.28%) today alone. That's on top of a \~10% drop yesterday, marking one of the worst single-day performances since the 1980s.
* Silver: Spot price $80.86/oz, down $4.29 (-5%) today. It plunged up to 36% yesterday – the biggest drop in over 40 years.
For context, gold's total market cap is now around $33 trillion (based on 221,000 tonnes of above-ground supply), while silver sits at $5 trillion (from \~1.84 million tonnes).
The three-day wipeout totals over $10 trillion, with gold losing $7.4 trillion from its peak and silver shedding $2.7 trillion.
.What Triggered This?
* Trump's nomination of Kevin Warsh as Fed Chair ease the fall of dollar and push investor to take profit after panic.
* Stronger USD, ETF outflows (GLD and SLV seeing heavy selling), and reduced China demand added fuel.
* Broader risk-off: Equities dipping, oil sliding.
How Does This Tie into Stocks? Precious metals aren't direct equities, but this has big implications for related sectors:
* Mining Stocks: GDX (VanEck Gold Miners ETF) and GDXJ (juniors) are likely following this trend as the follow metal price move. Companies like Newmont (NEM), Barrick (GOLD), and Agnico Eagle (AEM) could see 5-10%+ drops if they haven't already.
* ETFs: GLD and SLV are straightforward plays – if you're holding, this is a gut check. SLV's taken a bigger hit given silver's volatility.
* Broader Market Impact: Safe-haven unwind could pressure growth stocks if rates stay hawkish, but it might boost value plays or financials. S&P 500 down 1.2% in sympathy.
Some analysts see this as a needed correction in a long-term bull (targets like $6,000/oz gold by end-2026 still on table from JPM and others) while Others warn of more downside if Fed tightens aggressively. Central bank buying could provide support, but leveraged positions are getting liquidated also.
What do you think?