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A trader works on the trading floor of the New York Stock Exchange (NYSE) on Wednesday, January 28, 2026, in New York, United States.
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Precious metals and oil prices extended losses on Monday as analysts and strategists expressed concerns about the U.S. president Donald Trumpof choose Kevin Warsh successor Fed Chair Jerome Powell as a key trigger of the latest recession.
spot gold Prices fell 3.2% to $4,713.39 an ounce in early European trading, deepening losses. historic defeat On Friday, the index fell more than 9%, its biggest one-day drop since 1983.
spot silver Prices were down 2.7% at $82.29 an ounce at around 9:54 a.m. London time (4:54 a.m. ET). The white metal fell more than 31% on Friday, its worst single-day performance since 1980.
Worsening metals rout coincides with broader market downturn, pan-European STOXX 600 tracking loss from the Asia Pacific market. US stock futures The trading week also started with negative values.
5-10% split
“Our thesis has always been very simple,” Grace Peters, global investment strategist at JPMorgan Private Bank, told CNBC’s “Squawk Box Europe” on Monday.
“When we think about the portfolio, we look at geopolitical hedges, safe havens, Treasuries, the dollar, gold, but they don’t perform the same and we do think gold is the best geopolitical hedge,” Peters said.
Peters said factors such as central bank buying and support from institutional investors could push gold prices higher in 2026, noting that her team maintained its forecast of $6,500 an ounce by the end of the year.
When asked about investors’ reasons for holding gold, Peters said that while developed markets hold large amounts of gold, emerging market central banks do not, citing Poland and Brazil as examples.
“When you think about institutional investors and indeed retail investors, when you think about equities, fixed income and alternatives, gold represents just over 3% of (assets under management),” Peters said.
“I think we could have a 5-10% position in the portfolio, and when we look at our own clients’ books, they’re not in gold,” she added.
Fed worries
Charles-Henry Monchau, chief investment officer at Syz Group, said the sell-off began in late January, a month after investors worried that the Federal Reserve could soon lose its independence and expected the dollar to continue sliding, among other concerns.
The U.S. dollar index, which measures the greenback against a basket of major rivals, was up 0.2% on Monday morning. It has fallen 1.2% so far this year after falling more than 9% in 2025.
“That resulted in a big trade that was long commodities, long precious metals, long value, long emerging markets, etc. All of that was obviously paying for leverage,” Monshaw told CNBC’s “European Squawk Box” on Monday.
However, the unexpected nomination of Warsh, who is considered a “hawkish dove”, prompted investors to rethink. Munshaw said a core issue facing market participants is Warsh’s assertion that the Fed Reduce balance sheet size.
“As we all know, the market is addicted to liquidity, and that’s a lot of pressure right now. Also, there’s a lot of uncertainty around timing. He needs to be elected as a member of the Fed, and then he needs to be elected as Fed chairman,” Monjo said.
“There are also questions about Mr. Powell staying on the board…so there’s a lot of uncertainty, and markets don’t like uncertainty,” he added.
Nitesh Shah, head of European commodities and macroeconomic research at WisdomTree, said gold and silver prices had clearly “outperformed” for much of January, beating many analysts’ expectations.
“The price was a little too high to begin with, and it really only took one trigger to bring the price down, and that was the nomination of Kevin Wash,” Shah told CNBC.early european edition” on Monday.
He added: “Concerns that the Fed’s independence will be lost to Trump’s puppets have not surfaced, or haven’t surfaced yet, so one of the pillars holding up these metals is said to be falling apart.”
A healthy correction?
It’s not just JPMorgan Private Bank that is indifferent to gold’s recent downturn. Many analysts remain constructive on the outlook for the metal in the coming months.
WisdomTree’s Shah said the sharp sell-off in precious metals should be viewed as a “healthy correction” rather than a deeper pullback, noting that investors should prepare for volatility in the coming days.
Looking ahead to the end of the year, Shah said he expects gold prices to reach $5,020 an ounce and silver prices to reach about $88 an ounce during the same period. “So there is upside to our current situation, but some of the speculative bubble needs to be removed,” Shah said.
Silver prices over the past five days.
Meanwhile, analysts at Deutsche Bank reiterated that they expect gold prices to climb to $6,000 an ounce by the end of the year.
In a research note published on Monday, the German bank said it did not view the latest pullback as evidence of a durable shift and said gold’s thematic drivers appeared unchanged.
Oil prices also fell on Monday morning after Trump said the United States and Iran were “talking seriously,” suggesting an easing of “tensions” in Washington.huge fleet“Close to OPEC members.
international benchmark Brent Crude Oil Futures April delivery prices fell 5% to $65.88 a barrel, while U.S. West Texas Intermediate Crude Oil Futures March delivery was last down 5.3% at $61.76.
The drop in oil prices put oil prices on track for their biggest daily drop in more than six months, Reuters reported.
emergency mode
Max Kettner, chief multi-asset strategist at HSBC, said the latest decline should be viewed as position unwinding rather than evidence of market panic.
“If you look at gold and silver or the precious metals complex, for example, one of the questions we had as investors in January was why is there a risk-on environment if precious metals are rising at the same time?” Ketner said Monday on CNBC’s “European Early Edition.”
“So, by extension, now that precious metals have gone down, we can’t have the same thing happen again. We can’t say, okay, precious metals have gone down. That’s also bad, and that’s going to lead to some kind of panic mode,” he continued.
“Is this really going to have a huge impact on stocks and credit? Does it change the earnings outlook? Does it change the valuation outlook? No,” Ketner said.
