As if the volatility in commodity markets this week was not enough, gold, silver, and copper experienced free falls on Friday as investors rushed to book profits after prices had hit record highs earlier this week.
Gold prices slumped more than 5%, and fell below $5,000 briefly, while silver’s decline was more brutal as the white metal plummeted 15% to below $100.
On Thursday, gold had hit $5,600 per ounce, while silver traded above $120 per ounce.
However, prices had remained volatile throughout the week, with both metals hitting a series of record highs.
Meanwhile, oil prices also fell slightly after hitting four-month highs on Thursday on easing geopolitical tensions. However, at the time of writing, prices had mostly recovered.
Oil had hit a four-month high on Thursday on the back of increasing geopolitical tensions and concerns about supply.
Prices are likely to remain volatile ahead of this weekend’s Organization of the Petroleum Exporting Countries and allies’ meeting.
Bullion plunge
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Gold and silver prices came to a screeching halt on Friday as the precious metals experienced wild swings to the downside. Both metals are set to end a volatile week on the back foot.
Silver prices on COMEX, which peaked above $120 per ounce earlier this week, fell below $100 on Friday.
Meanwhile, gold prices briefly fell below the crucial mark of $5,000 per ounce earlier on Friday, with the yellow metal now trading around $5,030.94 an ounce.
US President Donald Trump on Friday announced that he selected former Federal Reserve Governor Kevin Warsh to lead the US Fed.
Anticipation of Warsh’s appointment had already caused the dollar index—which measures the US currency’s value against other currencies—to strengthen.
“The markets see Warsh as a more hawkish candidate than, for example, Kevin Hassett, who was seen to have high chances for the position at times and is considered a Trump loyalist,” Thu Lan Nguyen, head of FX and commodity research at Commerzbank AG, said in a report.
The final trading session of the month saw profit-taking after significant gains in gold and silver, which were up 17% and 39% in January, respectively.
This profit-taking followed several days of low liquidity, where relatively small trading volumes, fueled by the fear of missing out, led to disproportionately large price movements.
“Despite the savagery of the selloff, gold found some support around $5,000,” said David Morrison, senior market analyst at Trade Nation.
Silver saw even sharper moves, halting a seven-day winning streak and retreating aggressively after touching extreme highs earlier in the week.
At the time of writing, the gold contract on COMEX was at $5,077.25 per ounce, down 5.2%, while silver was at $98 per ounce, down 14.3%.
Oil reverses early losses
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After initially pulling back from four-month highs , crude oil prices managed to recover some of their upside momentum as the market witnessed unprecedented swings.
On Thursday, front-month West Texas Intermediate briefly traded above $66 per barrel before selling pressure pushed prices lower to $63.50; however, they subsequently rebounded.
Oil prices retreated from their peaks following President Trump’s announcement that he would engage in talks with Iran’s leaders.
This lifted hopes that diplomacy (“jaw-jaw”) would prevail over conflict (“war-war”).
However, the substantial presence of US warships in the region and an insistence from Pete Hegseth, the Secretary of War, that the US remains prepared to act serve as counterpoints to this optimism.
“Technically, crude continues to trade north of the downtrend which began last summer,” said Morrison.
Survey-based estimates detailing OPEC production will be released early next week, offering insight into the current state of oil supply within OPEC member nations.
Barbara Lambrecht, commodity analyst at Commerzbank AG, said:
Against this backdrop, it can be assumed that the eight OPEC+ countries, which will agree on their future production strategy over the weekend, will stick to their previous production targets.
The price of WTI crude oil was at $65.77 per barrel, up 0.6%, while Brent was at $70 per barrel, also up 0.6%.
Copper tumbles
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Base metals, including copper, were experiencing declines on Friday, concluding a tumultuous week.
This week was defined by reaching record-high prices, technical issues on exchanges, and a resurgence of uncertainty in the broader macro environment.
Benchmark copper futures on the LME have retreated toward $13,000 a ton after soaring above $14,500 on Thursday, a swing emblematic of speculative excess and thinning liquidity.
The shift comes as Chinese investors temper their exposure and the US dollar climbs after US President Trump nominated Kevin Warsh as the next Federal Reserve chair.
Warsh has recently endorsed lower interest rates, a stance that, paradoxically, lent near-term support to risk assets while rekindling debate over the Fed’s inflation priorities.
“Physical indicators now signal a cooling of the frenzy that recently gripped the copper market,” said Neil Welsh, head of metals at Britannia Global Markets.
The Yangshan premium has flipped into discount territory, Shanghai inventories remain elevated, and the forward spread has moved into contango, suggesting that tightening fears may have been overstated.
The significant volatility seen in copper futures over a short period is highlighted by CME’s recent decision to raise margin requirements.
The rally in copper prices exhibited a more speculative nature, moving beyond what is justified by supply dynamics, according to Welsh.
A key sign of this shift is that industrial consumers are resisting paying prices equivalent to futures, especially when added margins increase the financial burden.
The two-week period leading up to China’s Lunar New Year in mid-February is a critical risk window.
The potential for position squaring ahead of the holiday, coupled with a strengthening dollar, could limit upward price movement and initiate a period of consolidation.
Welsh said:
Traders may find opportunity in heightened volatility, but caution is warranted as market dynamics tilt from exuberance toward correction.
At the time of writing, the three-month copper contract on LME was at $13,414 per ton, down 2.6%.
