Gold down to $4,500, silver slumps too, sparking domino effect in stocks

Key topics:Gold and silver plunge, S&P 500 futures erase 2026 gains.AI hype fades, Nasdaq and tech stocks see sharp losses.Market volatility rises amid Warsh Fed nomination and weak sentiment..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Andre Janse van Vuuren and Anand Krishnamoorthy.Futures for the S&P 500 briefly erased their advance for the year as a rout in gold and silver extended a broad flight from riskier assets.The US benchmark was set to open 0.8% lower after earlier sliding as much as 1.5%. Gold tumbled as much as 10% and was on course for its steepest two-day drop since 1980 as a record-breaking rally unraveled at breakneck speed. Silver extended its losses to more than a third since Friday.Treasuries posted modest gains as a haven for some, while the dollar held onto Friday’s gains. Bitcoin fell to a 10-month low following a weekend selloff.“In just three brutal sessions, gold has officially flipped from a raging bull market into a bear market, according to the technical definition,” said Tony Sycamore, market analyst at IG Australia. “This kind of velocity and magnitude is extraordinary, even in a year that’s already seen parabolic gains and extreme volatility.”.Read more:.Gold surges to all-time highs on Federal Reserve speculation, global uncertainties.Monday’s price action points to mounting instability after a prolonged rally in metals and successive record highs in equities, driven by billions in AI investment. At the same time, investors are reassessing valuations and recalibrating expectations for monetary policy under a potential Warsh-led Fed..With the pick of Warsh — an economist known as much for his fierce criticism of the central bank as his views on monetary policy — the debate has abruptly shifted from short-term rates to the Fed’s $6.6 trillion balance sheet and its very role in markets.If confirmed by the Senate, the former Fed governor will succeed Jerome Powell when his term ends in May. Warsh, 55, aligned himself with Trump in 2025 by arguing publicly for lower rates, going against his longstanding reputation as an inflation hawk. The US president said Friday he had not asked Warsh to commit to cuts.“Investors are worried about ‘higher for longer,’” Francis Tan, Asia chief strategist at Indosuez, said about US interest rates. “However, the market’s confusion is whether Trump will add pressure to send more doves the market’s way via Warsh. This causes the volatility across asset classes and geographies.”The MSCI All Country World Index — one of the broadest measures of equity markets — fell 0.5% as the Asian benchmark slid 2.4%. South Korea’s Kospi — a bellwether for the AI sector — plunged 5.3%.Losses in tech came after Nvidia Corp. Chief Executive Officer Jensen Huang said the company’s proposed $100 billion investment in OpenAI was “never a commitment” and that the company would consider any funding rounds “one at a time.” “Jensen’s comments likely had a near‑term sentiment impact, particularly on AI‑exposed names that have rallied strongly,” said Gary Tan, a portfolio manager at Allspring Global Investments. “The remarks primarily served as a profit‑taking catalyst as we see some unwinding of crowded trades across the market.”.Read more:.The Economist: The forces reshaping global markets.In political news, the US government stumbled into a partial shutdown Saturday while waiting for the House to approve a funding deal Trump worked out with Democrats following a national uproar over Border Patrol agents’ killing of a US citizen in Minneapolis.Brent crude oil plunged as much as 7.4%, while copper slumped more than 5%.“Sentiment has turned defensive - but this is mainly risk trimming - not so much panic,” said Billy Leung, an investment strategist at Global X Management. “Overall sentiment is weak.”.© 2026 Bloomberg L.P.

Gold down to $4,500, silver slumps too, sparking domino effect in stocks

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